Co-authored by Robert S. Whitman and Howard M. Wexler
With employers about to ring in 2017, the New York State Department of Labor—with only two days to spare—has finalized regulations to increase the salary threshold for exempt status. The regulations, originally introduced on October 19, 2016, take effect on December 31, 2016.
Employers were hopeful that the State would abandon (or delay) these regulations given the now-enjoined U.S. Department of Labor’s overtime exemption rules that were set to go into effect on December 1, 2016. In response to such concern, however, the State DOL noted, “this rulemaking is not based on, or related to, the federal rulemaking concerning salary thresholds…this rulemaking is required by law and non-discretionary. Its purpose and effect is to maintain the longstanding historical relationship between minimum wage and salary threshold amounts…”
In keeping with the upcoming gradual increase in the State’s minimum wage levels, the new tiered salary thresholds for exempt status across the state will be:
Large Employers (11 or more employees) in New York City
- $825.00 per week on and after December 31, 2016;
- $975.00 per week on and after December 31, 2017; and
- $1,125.00 per week on and after December 31, 2018.
Small Employers (10 or fewer employees) in New York City
- $787.50 per week on and after December 31, 2016;
- $900.00 per week on and after December 31, 2017;
- $1,012.50 per week on and after December 31, 2018; and
- $1,125.00 per week on and after December 31, 2019.
Employers in Nassau, Suffolk, and Westchester Counties
- $750.00 per week on and after December 31, 2016;
- $825.00 per week on and after December 31, 2017;
- $900.00 per week on and after December 31, 2018;
- $975.00 per week on and after December 31, 2019;
- $1,050.00 per week on and after December 31, 2020; and
- $1,125.00 per week on and after December 31, 2021.
Employers Outside of New York City, Nassau, Suffolk, and Westchester Counties
- $727.50 per week on and after December 31, 2016;
- $780.00 per week on and after December 31, 2017;
- $832.00 per week on and after December 31, 2018;
- $885.00 per week on and after December 31, 2019; and
- $937.50 per week on and after December 31, 2020.
In addition to the increased salary levels, the new regulations adjust the amount employers can deduct for employees’ uniforms and claim as a meal and tip credit in line with the gradual increase of the minimum wage toward $15. There is a tiered system for these changes as well depending on the employer’s location.