On December 28, 2016, the New York State Department of Labor (“NYSDOL”) adopted final regulations scheduled to be effective, December 31, 2016, increasing the minimum salary thresholds for employees to be exempt from overtime under New York law. Although the NYSDOL had proposed the regulations in October 2016, they garnered little attention due to the proposed increase of the minimum salary threshold under the federal Fair Labor Standards Act, which was higher and scheduled to become effective on December 1, 2016. In light of a nationwide injunction granted by a federal court in Texas, the FLSA’s minimum salary threshold has not increased. Nevertheless, the injunction had no effect on the NYSDOL’s proposed increases under New York law, which took effect on December 31, 2016– three days after the adoption of the final regulations.
As a result, New York employers are still required to increase the minimum salary thresholds for the executive, administrative, and professional exemptions under New York law, although the increases are not as high as those that were proposed under the FLSA. The minimum salary thresholds for the overtime exemptions under New York law are now based on geographic location and in New York City, by employer size. These thresholds are set forth in the New York State Department of Labor’s Wage Order Summary for Miscellaneous Industry.
In addition, the minimum wage for employees has also increased, effective December 31, 2016. Although the basic minimum wage rate is now $9.70, in New York City large employers (of 11 or more employees) are required to pay a minimum hourly wage of at least $11.00, and small employers in New York City are required to pay $10.50 per hour. Employers in Long Island and Westchester are required to pay an hourly minimum wage rate of $10.00. The minimum wage rate is expected to increase each year until December 31, 2021. Information on these rates and tip credits is set forth in the Wage Order Summary for Miscellaneous Industry. The Hospitality Industry (including restaurants and fast food establishments) is subject to a separate Wage Order, and provides that as of December 31, 2016, Fast Food Workers are entitled to an $11.00 minimum wage in New York City, and a $10.70 minimum wage throughout the remainder of New York State. This information, including the effect of tips on the cash wage paid, is set forth on the Wage Order Summary for Hospitality Industry.
In the meantime, it is still not settled whether the final regulations under the FLSA will ever take effect. In the meantime, given the late finalization of the NYSDOL regulations and wage orders, employers need to act quickly to ensure compliance.