On October 19, 2016, the New York State Department of Labor (“DOL”) proposed amending its Wage Orders to increase the salary threshold for “white collar” executive and administrative employees to qualify as overtime exempt from the current $675.00 per week. (There is no minimum salary requirement for the professional overtime exemption in New York.) In line with the pending increases in the State’s minimum wage levels, the increases would raise the overtime exempt salary threshold in tiers for executive and administrative employees. If the proposed salary increases are adopted, employers would be required to pay the following minimum salaries as of their respective dates to maintain the executive and administrative overtime exemptions under New York law:
Large Employers (11 or more employees) in New York City
- $825.00 per week on and after 12/31/16
- $975.00 per week on and after 12/31/17
- $1,125.00 per week on and after 12/31/18
Employers in Nassau, Suffolk and Westchester Counties
- $750.00 per week on and after 12/31/16
- $825.00 per week on and after 12/31/17
- $900.00 per week on and after 12/31/18
- $975.00 per week on and after 12/31/19
- $1,050.00 per week on and after 12/31/20
- $1,125.00 per week on and after 12/31/21
Small Employers (10 or fewer employees) in New York City
- $787.50 per week on and after 12/31/16
- $900.00 per week on and after 12/31/17
- $1,012.50 per week on and after 12/31/18
- $1,125.00 per week on and after 12/31/19
Employers Outside of New York City, Nassau, Suffolk and Westchester Counties
- $727.50 per week on and after 12/31/16
- $780.00 per week on and after 12/31/17
- $832.00 per week on and after 12/31/18
- $885.00 per week on and after 12/31/19
- $937.50 per week on and after 12/31/20
For the first time, the minimum required salary level for the executive and administrative exemptions would be tied to an employer’s size and geographic location. Depending on an employer’s size and location, the minimum salary requirement under New York law would at times exceed the new federal minimum weekly salary level of $913.00, which is scheduled to take effect on December 1, 2016. For example, as of December 31, 2017, “large” employers in New York City would have to pay a salary of at least $975.00 per week. “Small” employers in New York City would exceed the federal limit as of December 31, 2018, when they would have to pay a weekly salary of $1,012.50. Employers in Nassau, Suffolk and Westchester Counties would have to pay $975.00 per week as of December 31, 2019. Employers in the rest of the State would not exceed the new federal level until December 31, 2020, when they would have to pay $937.50 per week.
New York not-for-profit corporations should note that although they may not be subject to the federal overtime salary requirements, they likely are covered by the New York salary requirements for “white collar” overtime exempt employees.
In addition to the increased salary threshold, the proposed Wage Orders also adjust the amount employers can deduct for a uniform allowance and claim as a meal and tip credit in line with the gradual increase of the minimum wage toward $15.00.
The DOL will be taking public comments on its proposed amendments to the minimum “white collar” salary levels until December 3, 2016. Phillips Lytle will be following the DOL’s action on this issue and will provide updates as they occur.