New York Department of Labor Proposes Regulations to Increase the Salary Threshold for Exempt Employees
The New York Department of Labor (DOL) issued proposed regulations which would modify several industry-specific wage requirements including the salary threshold for exempt executive or administrative employees. As employers may recall, to be considered an exempt executive or administrative employee under New York law, an employee must meet a test related to their duties, be paid on a salary basis, and meet the salary threshold set by the NY DOL. Currently, that threshold is $1,125.00 a week/$58,500 a year for New York City, Long Island, and Westchester County and $1,064 a week/$55,341.00 a year for the rest of New York State. Under the proposed regulations this threshold would increase to:
$1,200.00 a week/$62,400.00 a year for New York City, Long Island, and Westchester County and to $1,124.20/week/$58,458.40 a year for the rest of New York in 2024;
$1,237.50/week/$64,350.00 a year for New York City, Long Island, and Westchester County and to $1,161.65 a week/$60,405.80 a year for the rest of New York in 2025; and
$1,275.00 a week/$66,300.00 a year for New York City, Long Island, and Westchester County and to $1,199.10 a week/$62,353.20 a year for the rest of New York in 2026.
Employers are also reminded that the New York State minimum wage is set to increase as of January 1, 2024, to $16.00 in New York City, Long Island, and Westchester and $15.00 for the rest of New York, and in 2025 and 2026 there will be annual increases to the minimum wage of $0.50. Additionally, earlier this year, Governor Hochul signed a bill into law that amends the salary threshold to be considered an executive, administrative, or professional employee under certain provisions of Article 6 of the New York Labor Law. Importantly, Article 6 governs the method and frequency of wage payments. Certain provisions of Article 6 governing the method and frequency of pay do not apply to employees who serve in an executive, administrative, or professional capacity and are paid a designated minimum salary. Under this new law, this minimum salary will increase from $900 to $1,300 per week. This minimum salary is separate and distinct from the one used to determine whether an employee is exempt. This new law also establishes that employees who are considered a “clerical and other worker” under Article 6 rather than an executive, administrative, or professional employee are entitled to additional protections, including their advance consent being required for payment by direct deposit and payment of wages within 30 days. Employers who fail to pay wages to such employees within 30 days can be found guilty of a misdemeanor. This law will take effect on March 13, 2024, but the proposed regulations will likely take effect earlier, specifically, at the start of 2024. Employers should also remember that New York’s proposed salary threshold remains higher than the current salary threshold set by the U.S. Department of Labor and would also be higher than their recently proposed salary threshold. As we approach the new year, employers should take steps to ensure that their employees’ pay will increase commensurate with the applicable minimum wage and exempt thresholds. Employers with questions about the proposed regulations or exempt employees should contact Caroline Secola at csecola@fglawllc.com or any attorney at the firm.
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