Executive Summary: As of December 31, 2016, employers wishing to claim an administrative or executive exemption to New York State's overtime regulations must raise each exempt employee's salary threshold to $727.50-$825.00 per week, depending on the employer's location in the state. Additionally, on December 31, 2016, the first of several New York minimum wage increases will take effect.
New York employers may have breathed a sigh of relief when the U.S. Department of Labor regulations increasing exemption salary thresholds were enjoined last month, but that injunction does not affect New York administrative and executive exemptions.
On December 28, 2016, the New York Department of Labor formally adopted proposed amendments to the state's overtime regulations with respect to New York's administrative and executive exemptions. The first increase to the salary threshold requirement takes place tomorrow, December 31, 2016. Below is a chart setting forth the increases, based on location, number of employees, and year:
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INCREASED EXEMPTION SALARY THRESHOLDS |
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New York City (11 or More) |
New York City (10 or Fewer Employees) |
Nassau, Suffolk, and Westchester Counties |
Other New York Counties |
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December 31, 2016 |
$825.00 |
$787.50 |
$750.00 |
$727.50 |
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December 31, 2017 |
$975.00 |
$900.00 |
$825.00 |
$780.00 |
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December 31, 2018 |
$1,250.00 |
$1,012.50 |
$900.00 |
$832.00 |
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December 31, 2019 |
$1,125.00 |
$975.00 |
$885.00 |
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December 31, 2020 |
$1,050.00 |
$937.50 |
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December 31, 2021 |
$1,125.00 |
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FordHarrison LLP |
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In addition to overtime exemption salary thresholds, minimum wage hourly rates will increase as of December 31, 2016. The requisite minimum wage depends on the employer's industry and location.
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NEW YORK MINIMUM WAGE INCREASE* |
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Effective Date |
Basic Minimum Hourly Rates |
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New York City (11 or More) |
New York City (10 or Fewer Employees) |
Nassau, Suffolk, Westchester Counties |
Other New York Counties** |
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December 31, 2016 |
$11.00 |
$10.50 |
$10.00 |
$9.70 |
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December 31, 2017 |
$13.00 |
$12.00 |
$11.00 |
$10.40 |
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December 31, 2018 |
$15.00 |
$13.50 |
$12.00 |
$11.10 |
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December 31, 2019 |
$15.00 |
$13.00 |
$11.80 |
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December 31, 2020 |
$14.00 |
$12.50 |
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December 31, 2021 |
$15.00 |
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*includes industries such as homecare, hospitality (excluding fast food workers), and building services. **Annual increases for the rest of the state will continue until the rate reaches $15 minimum wage. |
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FordHarrison LLP |
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Note that employers are entitled to take tip credits against the minimum wage rates of tipped employees (excluding fast food workers). As the tip credit amounts will also change as of December 31, 2016, we encourage you to consult specific wage orders which address the amounts and criteria relating to tip credit.
The new minimum wage hourly rates for fast food employees are below.
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NEW YORK MINIMUM WAGE INCREASE Fast Food Employees in New York City |
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Effective Date |
Basic Minimum Hourly Rate |
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December 31, 2016 |
$12.00 |
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December 31, 2017 |
$13.50 |
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December 31, 2018 |
$15.00 |
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FordHarrison LLP |
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NEW YORK MINIMUM WAGE INCREASE Fast Food Employees Outside New York City |
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Effective Date |
Basic Minimum Hourly Rate |
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December 31, 2016 |
$10.75 |
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December 31, 2017 |
$11.75 |
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December 31, 2018 |
$12.75 |
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December 31, 2019 |
$13.75 |
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December 31, 2020 |
$14.50 |
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July 1, 2021 |
$15.00 |
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FordHarrison LLP |
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The tip credit is not applicable to fast food employees.
Bottom line: New York employers who claim an administrative or executive exemption must immediately assess whether they meet the new salary threshold requirements, or risk incurring overtime liability. Additionally, New York businesses must ensure they are complying with new minimum wage requirements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
