New York State Enacts Its Own Overtime Pay Rules

In a previous post, we discussed the new federal rules governing overtime pay, which have yet to be implemented due to legal challenges. The minimum salary threshold for eligible employees will increase to $47,476 per year if the new rules make it through the courts and become the law of the land.

While new federal rules for overtime pay have been put on hold, New York State has moved forward with its own increase in the minimum salary threshold for eligible employees. In New York, the minimum salary requirement for overtime pay and the rate of implementation is based on the employer’s location and the number of employees. Large New York City employers have already been hit the hardest as the minimum salary requirement jumped from $675 to $825 on December 31, 2016.

Below is a schedule of implementation for minimum salary thresholds for overtime pay eligibility in New York State:

  • New York City’s five boroughs, 11 or more employees
    December 31, 2016: $825 per week, $42,900 per year
    December 31, 2017: $975 per week, $50,700 per year
    December 31, 2018: $1,125 per week, $58,500 per year

  • New York City’s five boroughs, 10 or fewer employees
    December 31, 2016: $787.50 per week, $40,950 per year
    December 31, 2017: $900 per week, $46,800 per year
    December 31, 2018: $1,012.50 per week, $52,650 per year
    December 31, 2019: $1,125 per week, $58,500 per year

  • Nassau, Suffolk and Westchester Counties
    December 31, 2016: $750 per week, $39,000 per year
    December 31, 2017: $825 per week, $42,900 per year
    December 31, 2018: $900 per week, $46,800 per year
    December 31, 2019: $975 per week, $50,700 per year
    December 31, 2020: $1,050 per week, $54,400 per year
    December 31, 2021: $1,125 per week, $58,500 per year

  • All other New York counties
    December 31, 2016: $727.50 per week, $37,830 per year
    December 31, 2017: $780 per week, $40,560 per year
    December 31, 2018: $832.50 per week, $43,290 per year
    December 31, 2019: $885 per week, $46,020 per year
    December 31, 2020: $937 per week, $48,724 per year
    December 31, 2021: To be determined

These changes coincide with the increase in the New York State minimum wage, which is also based on location and number of employees. The minimum wage in New York will increase as follows:

  • New York City’s five boroughs, 11 or more employees
    December 31, 2016: $11 per hour
    December 31, 2017: $13 per hour
    December 31, 2018: $15 per hour

  • New York City’s five boroughs, 10 or fewer employees
    December 31, 2016: $10.50 per hour
    December 31, 2017: $12 per hour
    December 31, 2018: $13.50 per hour
    December 31, 2019: $15 per hour

  • Nassau, Suffolk and Westchester Counties
    December 31, 2016: $10 per hour
    December 31, 2017: $11 per hour
    December 31, 2018: $12 per hour
    December 31, 2019: $13 per hour
    December 31, 2020: $14 per hour
    December 31, 2021: $15 per hour

  • All other New York counties
    December 31, 2016: $9.70 per hour
    December 31, 2017: $10.40 per hour
    December 31, 2018: $11.10 per hour
    December 31, 2019: $11.80 per hour
    December 31, 2020: $12.50 per hour
    December 31, 2021: To be determined

New York employers now have to comply with the new state rules. These companies will also need to revisit this issue each year for the next three to five years as the minimum wage and minimum salary thresholds for overtime eligibility increase. At the same time, it is important to monitor the progress of federal overtime pay requirements, which could eventually be enacted with or without changes.

As we explained in the previous post about the proposed rule changes, compliance isn’t as simple as increasing employee salaries to the new minimum threshold. Exemptions are also based on the type of work performed by the employee. Also, the consequences of noncompliance in terms of back pay and correcting contributions to retirement and/or profit-sharing plans can be extremely costly.

While the changes laid out above affect New York employers, other states may follow New York’s lead. Watch for proposed changes to overtime pay rules from other state departments of labor, and consult with a labor attorney or human resources professional to plan accordingly.

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