Update to Federal and State Wage Laws

US Department of Labor Final Overtime Pay Rule

The US Department of Labor (“DOL”) has finalized a rule which would increase the salary thresholds necessary to qualify for an exemption from minimum wage and overtime requirements under the Fair Labor Standards Act (“FLSA”). 

Under the FLSA, workers are entitled to overtime pay unless they qualify for an exemption.  Such exemptions typically require satisfaction of both a duties test and a minimum salary threshold.  The DOL released its final rule increasing the minimum salary thresholds to qualify for the executive, administrative and professional exemptions—currently $684 per week ($35,568 annually) to $844 per week ($43,888 annually) as of July 1, 2024, and to $1,128 per week ($58,656 annually) as of January 1, 2025. 

The final rule also increases the salary threshold to qualify for the FLSA’s Highly Compensated Employee exemption, which currently sits at $107,432 per year.  As of July 1, 2024, the threshold for these workers will increase to $132,964 per year, and as of January 1, 2025, to $151,164 per year.[1]

Increase to the New York State Exempt Employee Salary Threshold

As of January 1, 2024, the NYS minimum weekly salary for administrative and executive employees was raised to $1,124.20 per week ($58,458.40 annually) statewide, and $1,200 per week ($62,400 annually) for NYC and Westchester, Nassau, and Suffolk Counties.[2]

NYS law currently imposes salary thresholds above those required under DOL’s final rule for employees qualifying for the executive and administrative exemptions. Accordingly, employers that are compliant with these NYS wage requirements for executive and administrative employees need not increase salaries for those employees in 2024 to comply with DOL’s final rule. However, because NYS law does not require professional employees to receive a minimum salary, New York employers relying on the professional exemption to justify exempt status may need to increase salaries to continue to qualify for the professional exemption under federal law. Multi-state employers with employees outside of New York should consult with counsel regarding other state overtime exemption thresholds to determine what other changes to employee wages may be necessary.

Employers with questions about these updates, employee exemption classifications, wage practices, or other overtime pay requirements should contact Jack Culhane at jculhane@fglawllc.com or any other attorney at the firm.

[1] NYS, however, does not recognize a highly compensated employee exemption. 

[2] Effective March 13, 2024, amendments to the New York Labor Law raised the salary threshold for pay frequency requirements for executive, administrative, and professional capacity employees to $1,300 per week (or $67,600 annually). However, such pay frequency requirements are distinct from the overtime pay requirements discussed above.

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