Q: As a New York employer, what do I need to know about the increases to the minimum wage and the exempt salary threshold?

A: This is a timely question, since both the minimum wage and exempt salary threshold increased, effective December 31, 2016.

Minimum Wage

The minimum wage for many New York employers increased to $9.70/hour. The minimum wage for large employers in New York City (11 or more employees) increased to $11.00/hour, and to $10.50/hour for small employers in New York City (10 or less employees). The minimum wage for employers in Nassau, Suffolk, & Westchester Counties is now $10.00/hour.

And that’s not the end. The minimum wage will increase each year until it reaches $15 in each location, pursuant to the following schedule:

Location 12/31/17 12/31/18 12/31/19 12/31/20 2021*
NYC – Large Employers $13.00 $15.00
NYC – Small Employers $12.00 $13.50 $15.00
Nassau, Suffolk, & Westchester Counties $11.00 $12.00 $13.00 $14.00 $15.00
Remainder of New York State $10.40 $11.10 $11.80 $12.50 *

Starting in 2021, the annual increases will be published by the Commissioner of Labor on or before October 1.

If an employee works in two or more different minimum wage locations, the employer may pay either the highest rate for all hours worked, or pay each hour worked in each location at the applicable minimum wage for that location.

Fast food workers and tipped food service workers are subject to different minimum wage rates and increases.

Overtime Exempt Salary Threshold

In addition to the minimum wage increases, the overtime exempt salary thresholds for New York administrative and executive employees were increased to a salary of $825/week ($42,900 annually) for large employers in New York City, $787.50/week ($40,950 annually) for small employers in New York City, $750/week ($39,000 annually) for employers in Nassau, Suffolk, and Westchester counties, and $727.50/week ($37,830 annually) for employers in other New York counties.

New York employers should be mindful that even though the federal increases in the exemption salary thresholds have been blocked for the time being, the New York increases are higher than the existing federal thresholds, and thus New York employers must follow the state’s higher thresholds. Thus, New York employers need to increase salaries for those exempt employees who do not meet the new threshold, or reclassify them as non-exempt.

The salary thresholds for exempt status in New York will continue to increase each year until they reach $1,125/week, pursuant to the following schedule:

Location 12/31/17 12/31/18 12/31/19 12/31/20 2021
NYC – Large Employers $975.00 $1,125.00
NYC – Small Employers $900.00 $1,012.50 $1,125.00
Nassau, Suffolk, & Westchester Counties $825.00 $900.00 $975.00 $1,050.00 $1,125.00
Other New York Counties $780.00 $832.50 $885.00 $937.50