December 27, 2016
Employment Law Alert
Employment Law Alert
Although the increases to the FLSA’s salary basis for exempt white-collar employees were halted by a nationwide injunction, the New York State Department of Labor recently published its own increases to the salary basis for the executive and administrative exemptions under the New York Labor Law. These increases, along with the scheduled annual increases to New York’s minimum wage, take effect December 31, 2016. This alert highlights what New York employers need to know.
While many New York state employers breathed a sigh of relief after a nationwide preliminary injunction halted implementation of the U.S. Department of Labor’s (USDOL) new overtime pay rule, which would have increased the Fair Labor Standards Act’s (FLSA) salary threshold for the “white collar” exemptions to $913 per week, they are not off the hook. On December 28, 2016, the New York State Department of Labor (NYSDOL) published its own rule increasing the base salary for the executive and administrative exemptions  under the New York Labor Law (NYLL). These increases will become effective December 31, 2016, irrespective of the status of the federal regulations. In addition, the NYSDOL’s increase to the minimum hourly wage, likewise scheduled for December 31, 2016, will proceed  as expected.
On October 19, in the midst of many employers’ haste to comply with the anticipated federal increases, the NYSDOL proposed to amend the existing wage orders to increase the salary threshold for the executive and administrative exemptions under the NYLL. Similar to the gradual increases implemented for New York’s minimum wage levels, the amendments raise the salary threshold, from the current amount of $675 per week, in tiers based on geography and size, as set forth below:
The NYSDOL’s changes received little attention previously, as most employers’ conformity with the USDOL’s increases would have put them in compliance with the NYSDOL’s increases until at least the end of 2017. To this end, employers who implemented salary increases in anticipation of the USDOL’s rule changes may rest easy for a couple of years (provided, of course, that their employees are classified properly under the USDOL’s corresponding duties tests). Employers who suspended or canceled planned salary increases, as well as employers who were not previously concerned about the increases because they are not subject to the Fair Labor Standards Act (FLSA) —many small nonprofits in particular— however, must be careful to ensure compliance with New York’s changes to the salary threshold. As these changes will require an increase for many New York employees to remain exempt, regardless of whether the USDOL’s increases ever take effect.
The NYSDOL’s annual minimum wage increases are also scheduled to continue. Specifically, as of December 31, 2016, the most broadly applicable minimum wage requirements are as follows:
Violations of the NYLL carry severe penalties, including liquidated damages and attorneys’ fees. Accordingly, we urge employers comply with the increases to the minimum wage and ensure their employees are correctly classified, with respect to both the NYSDOL’s salary changes and the corresponding duties tests.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.