Over The Next Two To Five Years, Manhattan, NY Increases, To $48,750 – $58,500, The Minimum Salary For The Executive And Administrative Exemptions From Overtime Pay Requirements

On December 27, 2016, the New York State Department of Labor (the “State Department of Labor” or the “NY DOL”) promulgated a new wage order, the Minimum Wage Order for Miscellaneous Industries and Occupations, 12 N.Y.C.R.R. Part 142 (the “Wage Order”), which, effective December 31, 2016 — depending on the county and the size of the employer — raises, from $675 per week ($35,100 per year) to an amount from $727.50 per week to $825 per week ($37,830 to $42,900 per year), New York State’s minimum salary level for the executive exemption and the administrative exemption from overtime pay requirements.

In staggered increases over a period of two to five years — again, depending on the county and the size of the employer — the same Wage Order further increases, to an amount from $937.50 per week to $1,125 per week ($48,750 to $58,500 per year) New York State’s minimum salary level for the executive exemption and the administrative exemptions from overtime pay laws.

Minimum Salary Level

Specifically, the State Department of Labor’s Wage Order provides that the minimum salary level for the executive exemption and the administrative exemption (from overtime pay requirements) applying to employers in Manhattan, NYC with eleven or more employees will increase to:

• $825 per week ($42,900 per year) on and after December 31, 2016;
• $975 per week ($50,700 per year) on and after December 31, 2017; and
• $1,125 per week ($58,500 per year) on and after December 31, 2018.

Under the Wage Order, the minimum salary level for the executive exemption and the administrative exemption (from overtime pay laws) governing employers in Manhattan, NYC with ten or fewer employees will rise to:

• $787.50 per week ($40,950 per year) on and after December 31, 2016;
• $900 per week ($46,800 per year) on and after December 31, 2017;
• $1,012.50 per week ($52,650 per year) on and after December 31, 2018; and
• $1,125 per week ($58,500 per year) on and after December 31, 2019.

Pursuant to the NY DOL’s Wage Order, the minimum salary level for the executive exemption and the administrative exemption applying to employers in Nassau, Suffolk and Westchester Counties will increase to:

• $750 per week ($39,000 per year) on and after December 31, 2016;
• $825 per week ($42,900 per year) on and after December 31, 2017;
• $900 per week ($46,800 per year) on and after December 31, 2018;
• $975 per week ($50,700 per year) on and after December 31, 2019;
• $1,050 per week ($54,600 per year) on and after December 31, 2020; and
• $1,125 per week ($58,500 per year) on and after December 31, 2021.

As per the Wage Order, the minimum salary level for the executive exemption and the administrative exemption governing employers in New York State, but outside of Manhattan, NYC and outside of Nassau, Suffolk and Westchester Counties, will rise to:

• $727.50 per week ($37,830 per year) on and after December 31, 2016;
• $780 per week ($40,560 per year) on and after December 31, 2017;
• $832 per week ($43,264 per year) on and after December 31, 2018;
• $885 per week ($46,020 per year) on and after December 31, 2019;
• $937.50 per week ($48,750 per year) on and after December 31, 2020.

Overtime Pay And The White Collar Exemptions

The New York State Minimum Wage Act, N.Y. Labor Law § 650 et seq., requires that employees in Manhattan, NYC be paid at least the Manhattan minimum wage — presently $9.70 per hour to $11.00 per hour, depending on the county and the size of the employer — for all hours worked. Covered employees who work overtime must be paid at a rate that is 1½ times their regular, “straight-time” hourly rate of pay.

For non-residential employees in Manhattan, this overtime rate applies to all time in excess of 40 hours in a payroll week. For residential employees (that is, live-in workers), this overtime rate applies to all time in excess of 44 hours in a payroll week.

New York State law sets forth exemptions from overtime pay for, among other categories of ‘white collar’ workers, employees employed as bona fide executive or administrative employees, but requires that these categories of employees be paid at least 1½ times the Manhattan minimum wage for their overtime hours.

In Manhattan, NYC, a bona fide executive employee, within the meaning of the exemption from overtime pay, is any employee who is paid for his services at the above-stated, minimum salary level on a salary basis and:

• Whose primary duty is management of the enterprise or of a customarily recognized department or subdivision; and
• Who customarily and regularly directs the work of two or more other employees; and
• Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or other change of status of other employees are given particular weight; and
• Who customarily and regularly exercises discretionary powers.

In the Empire State, a bona fide administrative employee, within the meaning of the exemption from overtime pay, is any employee who is paid for his services at the above-listed, minimum salary level on a salary basis and:

• Whose primary duty is the performance of office or non-manual field work directly related to the management policies or general operations of the employer; and
• Who customarily and regularly exercises discretion and independent judgment; and
• Who regularly and directly assists the employer, or an employee employed in a bona fide executive or administrative capacity (for example, employment as an administrative assistant); or who performs, under only general supervision, work along specialized or technical lines requiring special training, experience or knowledge.

Take-Aways For Employers

Employers in Manhattan must review the wages they pay their workers, and the NY DOL’s Wage Order’s staggered schedule of increases in the minimum salary level for the executive exemption and the administrative exemption from overtime pay requirements, to ascertain whether, and if so when, the employers must raise salaries for employees, who perform the above-stated job duties of an executive employee or an administrative employee, in order to render or keep those employees exempt from overtime pay.

Alternately, employers in Manhattan, NY may convert exempt employees earning less than the new minimum salary levels to non-exempt (that is, eligible for overtime pay).

Call the Law Offices of David S. Rich, LLC at (347) 472-1026 to speak with a knowledgeable labor and employment lawyer about ensuring that your company complies with overtime pay and other wage and hour laws, or to retain a skilled overtime attorney to defend your company in unpaid overtime lawsuits or other wage and hour litigation.