New York Legislature to Increase Executive, Administrative, and Professional Compensation Threshold, Expanding Certain Wage Payment Protections

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New York’s threshold for a white-collar worker exemption is slated to be increased under legislation passed by the New York legislature last week.  This requirement does not directly relate to New York’s salary threshold for white-collar exemptions under the New York Wage Orders, the pending increases to which we discussed earlier this year, but rather to a different threshold for the applicability of several wage-related requirements under New York law. 

Article 6 of the New York Labor Law is titled “Payment of Wages” and sets forth many of New York’s protections for employees’ wages.  This statute establishes generally applicable requirements that apply to all private sector employees including, for example, restrictions on wage deductions in Section 193 of the Labor Law.1  Several notable provisions within the statute, however, exclude employees working in a “bona fide executive, administrative or professional capacity whose earnings are in excess of nine hundred dollars a week.” 

On June 7, the New York legislature passed Senate Bill 5572 / Assembly Bill 6796 which, if signed by the governor, would increase this current $900 per week threshold to $1,300.  The Senate sponsor’s memo notes that the bill’s purpose is to increase the number of employees who can seek the assistance of the State Department of Labor, which the sponsor says has refused to take wage claims from administrative, professional, or executive employees earning more than the current threshold of $900.  The sponsor further notes that this increase keeps the threshold in line with inflation, noting it was last increased from $600 to the current $900 per week in 2007.

While it is unclear what effect this bill would have on the state’s enforcement policies, this bill would expand the applicability of several provisions within Article 6 of the Labor Law and the regulations adopted thereunder.  Employees who do not meet this increased threshold would, under this bill’s proposed terms, lose this exemption and be, thus, subject to the requirements for the following:

  • Labor Law § 191: Frequency of Pay (Requiring not less than weekly pay for most “manual workers,” bi-weekly pay for “clerical and other workers,” and monthly pay for “commission salespersons”)
  • Labor Law §192: Cash Payment of Wages (Requiring employee consent for direct deposit)
  • Labor Law §198-c: Benefits and Wage Supplements (Requiring strict employer compliance with employer policies on expense reimbursement, employee benefits, vacation, severance, and holiday pay)
  • 12 NYCRR Part 192: Methods of Payment of Wages (Limits the forms of permissible payments under the New York Labor Law to Cash, Check, Direct Deposit, and Payroll Card, and sets forth requirements associated with each)

This bill will be delivered to Governor Hochul at some point before the end of the year, and she will have 10 business days to sign or veto this bill. Littler will continue to monitor the status of this bill, which would take effect 180 days after signing.

Footnotes

​1 See Pachter v. Bernard Hodes Group, Inc., 10 N.Y.3d 609, holding that executives are covered by article 6 and Section 193 of the Labor Law unless expressly excluded.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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