Just Before New Exemption Salary Thresholds Become Effective Under Federal Overtime Law, NY DOL Issues Proposed Changes to Its Own Exemptions
Are you a responsible, prepared employer who has already addressed the changes coming to federal overtime exemption rules on December 1, 2016? Have you thoroughly planned for these changes, and have now become bored and listless since your work is done? Are you searching for fresh overtime-based challenges? Well, search no more! The NY DOL has issued a complex new proposed rule that, if passed, will keep New York employers busy – and quite likely confused – for years to come!
Yes, that’s right. Just weeks before the federal overtime changes are set to go into effect on December 1st the New York Department of Labor has issued a proposed rule to significantly change New York’s salary thresholds for the administrative, professional and executive exemptions. The thresholds differ depending on the size and location of the employer.
Here is the breakdown:
For employees working for “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;
$1,125.00 per week on and after December 31, 2018.
For employees working for “small” employers (fewer than 11 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;
$1,125.00 per week on and after December 31, 2019.
For employees working 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;
$1,125.00 per week on and after December 31, 2021.
For upstate employees –i.e., those working anywhere other than New York City or Nassau, Suffolk, or Westchester County:
$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;
$937.50 per week on and after December 31, 2020.
These changes mean, among other things, that as of December 31, 2017 for large NYC employers and December 31, 2018 for small NYC employers, the threshold for the administrative, professional and executive exemptions under New York law — $975/week and $1,125.00/week, respectively — will be greater than the threshold under federal law at that time, $913/week. The federal thresholds may or may not catch up to the state thresholds on or about December 1, 2019, based on the automatic increase mechanism built into the rules. Specifically, the federal threshold will increase every three years as necessary to meet the 40th percentile of full-time salaried workers in the lowest-wage Census Region.
These changes also mean that businesses with employees in various parts of the state will be forced to apply different salary thresholds to different employees. For example, where two employees have the exact same duties and the exact same salary, one might be exempt and the other non-exempt because one works in, say, Westchester County and the other works in, say, Sullivan County.
The NY DOL has invited public comments on the proposed rule. Comments may be submitted until December 2, 2016.
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Portnoy, Messinger, Pearl & Associates, Inc. is here to answer any questions you have regarding the proposed rule and/or how the rule would interact with the new federal exemption thresholds. Please keep in mind that in addition to our staff of seasoned HR consultants, we also have a staff of experienced employment lawyers on hand to address any questions you may have regarding legal compliance. Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.