As noted in our recent client alert, a federal court enjoined the U.S. Department of Labor's implementation of its new overtime exemption rule that would have gone into effect on December 1. Yet, even with this ruling, New York employers must continue to ensure that their otherwise exempt employees are paid a salary that meets state and local requirements, which mandate much higher pay than the federal threshold. Otherwise, the employees will be non-exempt, and eligible to receive overtime pay.
Throughout New York State, for an employee to be considered exempt from overtime pay, in addition to meeting certain minimum requirements related to primary job duties, he or she must currently earn at least $675 per week ($35,100 per year). This salary threshold, however, is scheduled to rise on December 31, 2016, as New York State's Department of Labor ("NYSDOL") has proposed regulations which, in part, increase the minimum salary threshold for exempt employees based upon the size of the employer and its location within New York State.
Upon the conclusion of public comment (which ends Saturday, December 3, 2016) and executive review, if the NYSDOL's proposed regulations are adopted, beginning on December 31, 2016, New York City employers with 11 or more employees would be required to pay their employees $825 per week ($42,900 per year) to maintain the exemption. New York City employers with 10 or fewer employees would face a slightly lower threshold of $787.50 per week ($40,950 per year) to maintain the exemption. Thereafter, on December 31 of subsequent years, these new minimum salary thresholds would greatly increase until they reach $1,125 per week ($58,500 per year) in New York City and other locations.
For reference, below are the NYSDOL's proposed minimum salaries that New York employers would be required to pay for their employees to remain exempt.
Employers in New York City
(10 or fewer employees)
(11 or more employees)
Employers in Nassau, Suffolk, and Westchester Counties
Employers outside of New York City, and Nassau, Suffolk, and
New York employers are urged to promptly review their compensation practices to ensure compliance with New York State law, and should be prepared to comply with the proposed NYSDOL regulations if and when they are adopted. Lowenstein Sandler LLP's employment law attorneys are experienced and knowledgeable about wage and hour compliance and would be pleased to provide legal counsel if you have questions.