The Biden Administration’s efforts to increase the current federal minimum wage from $7.25 an hour to $15 an hour have been delayed, but in New York, New Jersey, Connecticut, Pennsylvania and other states and municipalities, most employers in 2021 are already subject to new minimum hourly wage rates and minimum salaries for exempt employees well in excess of the federal minimum wage. Moreover, federal, state and local government agencies have indicated that there will be increased enforcement efforts in 2021 regarding minimum wage and other wage hour violations.
New Minimum Wage Rates
New 2021 Minimum Salary Requirement for Exempt Employees
In order to be exempt from overtime pay requirements, exempt employees must meet a duties test and be paid a minimum salary. The minimum federal salary requirement for exempt employees in 2021 is currently unchanged at $684 per week or $35,568 annually. Additionally, improper classifications of exempt employees or independent contractors can lead to overtime pay and minimum wage violations.
The minimum salary requirement for exempt employees in New York City in 2021 remains unchanged at $1,125 per week, or $58,500 per year. However, on January 1, 2021, the minimum salary requirement for exempt employees in Nassau, Suffolk and Westchester counties increased to $1,050 per week or $54,600 per year. The minimum salary requirement for exempt employees in upstate and all other New York State counties increased on January 1, 2021 to $937.50 per week or $48,750 annually.
Increased Enforcement in 2021
Increased enforcement of minimum wage, minimum salary requirements and other wage hour laws by federal, state and local governments is also planned. Penalties for violations include back wages, liquidated damages, interest and attorneys’ fees. Moreover, disclosures of wage hour violations may be required in bids and applications for government contracts and applications, and government funding, and violations could lead to disqualification for federal, state and local contracts or funding.
Compliance with all state and federal minimum wage and other wage hour laws in 2021 is, therefore, critical. Employers should review and audit their compensation and wage hour policies to comply with these new wage hour requirements and increased enforcement initiatives.