As we all know, the revisions to the FLSA's "white collar" exemptions will take effect December 1 and will increase the salary level required for the executive, administrative, and professional exemptions to $913 per week (or $47,476 per year). Avid wage and hour practitioners in New York have been waiting to see if the State DOL would propose a similar increase for exempt status under the NY Labor Law.
The wait is over.
On October 19, State DOL proposed amendments to its existing wage orders that would increase the salary threshold from the current $675 per week. In keeping with the upcoming gradual increase in the State's minimum wage levels, the proposal would raise the salary threshold in tiers:
Large Employers (11 or more employees) in New York City
- $825.00 per week on and after 12/31/16;
- $975.00 per week on and after 12/31/17; and
- $1,125.00 per week on and after 12/31/18;
Small Employers (10 or fewer employees) in New York City
- $787.50 per week on and after 12/31/16;
- $900.00 per week on and after 12/31/17;
- $1,012.50 per week on and after 12/31/18; and
- $1,125.00 per week on and after 12/31/19;
Employers in Nassau, Suffolk, and Westchester Counties
- $750.00 per week on and after 12/31/16;
- $825.00 per week on and after 12/31/17;
- $900.00 per week on and after 12/31/18;
- $975.00 per week on and after 12/31/19;
- $1,050.00 per week on and after 12/31/20; and
- $1,125.00 per week on and after 12/31/21;
Employers Outside of New York City, Nassau, Suffolk, and Westchester Counties
- $727.50 per week on and after 12/31/16;
- $780.00 per week on and after 12/31/17;
- $832.00 per week on and after 12/31/18;
- $885.00 per week on and after 12/31/19;
- $937.50 per week on and after 12/31/20
If these salary thresholds are adopted, the minimum requirement for exempt employees in New York will surpass the federal threshold of $973 at various points in time, the earliest on December 31, 2017 for "large" New York City employers. However, the FLSA salary levels are subject to automatic revision every three years, beginning in 2020, based on the 40th percentile of full-time salaried workers in the region in which the salary level is lowest (historically, the South).
In addition to the increased salary threshold, the proposed Wage Orders also adjusts the amount employers can deduct for a uniform allowance and claim as a meal and tip credit in line with the gradual increase of the minimum wage toward $15.
While these are proposed amendments, we expect they will be implemented given that they track the forthcoming minimum wage increases. The Department of Labor will receive public comments until December 3, 2016. We will update you once the regulations become effective.
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.