Amendment to New York State Wage Orders Substantially Raises Salary Requirements for Exempt Employees

While it looks like the Department of Labor regulations implementing new exempt salary thresholds under the federal Fair Labor Standards Act are dead — or at least in critical condition — under the new administration, we remind employers in New York state that they must still contend with recent statewide changes to exempt salary thresholds. The New York State Department of Labor has adopted amendments to the state’s minimum wage orders that increased the minimum salary threshold for exempt executive and administrative employees in most industries, including building services (see 12 N.Y.C.R.R. 141), “miscellaneous industries and occupations” (see 12 N.Y.C.R.R. 142), nonprofit institutions (see 12 N.Y.C.R.R. 143) and hospitality (see 12 N.Y.C.R.R. 146). The wage orders do not provide a salary requirement for the professional employee exemption (either the “learned professional” or “creative” exemption).

Under the amendments, which became effective Dec. 31, 2016, the minimum thresholds differ, depending on employer size and location. As a result, for the first time, the salary level required to be exempt from overtime differs in different parts of the state, as indicated in the table below.

To properly classify employees as exempt, New York employers must ensure that the employees are earning at least the salary basis of the FLSA or the New York wage orders, whichever is higher.

Minimum Thresholds

New York City Employers: Large Employers (11 or more employees)

• $825/week ($42,900 annually) on and after Dec. 31, 2016
• $975/week ($50,700 annually) on and after Dec. 31, 2017
• $1,125/week ($58,500 annually) on and after Dec. 31, 2018

New York City Employers: Small Employers (10 or fewer employees)

• $787.50/week ($40,950 annually) on and after Dec. 31, 2016
• $900/week ($46,800 annually) on and after Dec. 31, 2017
• $1,012.50/week ($52,650 annually) on and after Dec. 31, 2018
• $1,125/week ($58,500 annually) on and after Dec. 31, 2019

Employers Located in Nassau, Suffolk and Westchester Counties

• $750/week ($39,000 annually) on and after Dec. 31, 2016
• $825/week ($42,900 annually) on and after Dec. 31, 2017
• $900/week ($46,800 annually) on and after Dec. 31, 2018
• $975/week ($50,700 annually) on and after Dec. 31, 2019
• $1,050/week ($54,600 annually) on and after Dec. 31, 2020
• $1,125/week ($58,500 annually) on and after Dec. 31, 2021

Employers Located Outside New York City and Nassau, Suffolk and Westchester Counties

• $727.50/week ($37,830 annually) on and after Dec. 31, 2016
• $780/week ($40,560 annually) on and after Dec. 31, 2017
• $832/week ($43,264 annually) on and after Dec. 31, 2018