The Fair Labor Standards Act and New York’s Minimum Wage Orders require employers to pay non-exempt employees overtime for all hours worked over 40 hours in a workweek.
However, certain classifications of employees are exempt from overtime requirements, including “executive,” “administrative,” and “professional” employees. To be exempt, an employee must satisfy a number of factors, including having exempt duties as his or her primary duty and being paid the requisite salary threshold. Because New York’s salary threshold is greater than the federal FLSA threshold, New York employers must comply with the state threshold to classify a position as exempt.
Effective December 31, 2018, the salary threshold (or minimum salary that can be paid to those classified as exempt pursuant to the administrative and executive exemptions under New York state law) is increasing significantly, as referenced in our
prior advisory. Consequently, employers must pay particular attention as year-end approaches to ensure that those positions they intend to keep exempt, remain exempt.
The changes in salary threshold for administrative and executive exemptions depend on both the location of the employer and the number of employees. This chart reflects the new salary thresholds, effective December 31, 2018:
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New York City
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Large Employers with 11 or more employees
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$1,125.00 per week
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Small Employers with 10 or fewer employees
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$1,012.50 per week
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Nassau, Suffolk, and Westchester counties
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$900.00 per week
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Outside of Nassau, Suffolk, and Westchester counties
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$832.00 per week
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For non-exempt employees, the minimum wage in New York is also increasing at the end of the year. The following chart reflects the new minimum wage, effective December 31, 2018, for all employees in New York except fast food workers:
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New York City
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Large Employers with 11 or more employees
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$15.00
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Small Employers with 10 or fewer employees
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$13.50
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Nassau, Suffolk, and Westchester counties
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$12.00
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Outside of Nassau, Suffolk, and Westchester counties
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$11.10
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The minimum wage for fast food employees will increase on December 31, 2018 as follows:
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Outside of New York City
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$12.75
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In light of these increases, employers should evaluate the salaries of those employees who are currently covered by the administrative and executive exemptions and ensure the relevant salaries are increased for the pay period that covers December 31, 2018. If, on the other hand, employers decide to reclassify as non-exempt any of their employees who are currently exempt, they must ensure they are complying with their overtime obligations for the pay period in which the conversion takes place. Employers must also ensure that their employees are paid the minimum wages in accordance with applicable geography and employer size.
