Salary Thresholds Under New York State Law For White Collar Overtime Exemptions

In Part One of this article, we discussed tests for allowing exemption from overtime pay for “white collar” professional, executive and administrative employees under federal and New York State law.

Effective December 31, 2018, New York State’s salary basis threshold for exempt executive and administrative (but not professional) employees increased. Employers should periodically review the job duties, functions and salaries of those currently classified as exempt and, if they wish to maintain the exemption for those below the new thresholds, must increase their salaries accordingly. Here are the new minimum salary requirements to maintain exemptions from overtime for employers in New York State:

Employers in New York City

• Large employers (11 or more employees)
  • $1,125.00 per week ($58,500 annually) on and after 12/31/18
• Small employers (10 or fewer employees)
  • $1,012.50 per week ($52,650 annually) on and after 12/31/18
  • $1,125.00 per week ($58,500 annually) on and after 12/31/19

Employers in Nassau, Suffolk, and Westchester Counties

• $900.00 per week ($46,800 annually) on and after 12/31/18
• $975.00 per week ($50,700 annually) on and after 12/31/19
• $1,050.00 per week ($54,600 annually) on and after 12/31/20
• $1,125.00 per week ($58,500 annually) on and after 12/31/21

Employers Outside of New York City and Nassau, Suffolk, and Westchester Counties

• $832.00 per week ($43,264 annually) on and after 12/31/18
• $885.00 per week ($46,020 annually) on and after 12/31/19
• $937.50 per week ($48,750 annually) on and after 12/31/20

New York State has no minimum salary for exempt “professional” employees, although most of those employees would still be subject to the federal salary minimum for exemption ($455 per week, or $23,660 annually). The U.S. Department of Labor (“DOL”) has not raised the federal minimum salary for exemption since 2004, but on March 7, 2019, the DOL published a proposed rule that would increase the salary threshold for managerial, administrative and professional white collar exemptions to $679 per week ($35,308 per year), to take effect on January 1, 2020.

New York Fashion Industry employers should review the job duties, functions and salaries of their employees whom they currently classify as exempt from overtime pay to insure compliance with both the job duties and salary requirements. For an employee whose salary falls below pay requirements, the employer will have to decide whether to increase the salary in order to be able to continue the overtime exemption or to reclassify the currently exempt employee as non-exempt and pay them overtime for hours worked over forty in a week.

For those currently exempt employees whom the employer decides to reclassify as non-exempt, the employer should insure that all their work time is accurately recorded as of the date of change and going forward. Finally, employers should make it a point to conduct regular reviews of the primary duties of those employees it wishes to continue as exempt, since merely paying the higher salaries will not be sufficient. To qualify for the overtime exemption, employers will be required to meet both the salary test and the job duties test.

SUMMARY

Federal and state overtime law are quite fact specific. Failure to comply can lead to expensive administrative and court proceedings. The statutes of limitations – that is, the look back periods the agencies and the courts may consider in calculating overtime pay deficiencies – are two years under federal law (three years if a willful violation is found), but are six years under New York State law. And both federal and state laws provide for liquidated (double) damages and for an employer to pay the legal fees of a successful plaintiff’s lawyer. Moreover, class and collective actions abound. In short, stay current on what you need to know and consult with employment counsel as needed and whenever in doubt; or be prepared to endure exceedingly painful, protracted and costly legal consequences.

Credit: Evan J. Spelfogel

See post…“White Collar Overtime Exemptions in the Fashion Industry – Part I“