Jan 3, 2020
New York’s overtime salary threshold and minimum wage increased, effective Dec. 31
Starting Tuesday, Dec. 31, 2019, the minimum annual salary an employee must be paid in order to be exempt from overtime will be increased based on geographic region.
Specifically, the minimum annual salary for exempt employees for all New York City employers will be $58,500. The minimum salary for exempt employees in Nassau, Suffolk and Westchester counties will increase to $50,700. The minimum salary for exempt employees in all other New York counties will be $46,020.
In order to be considered exempt from overtime pay, an employee must not only be paid on a salary basis at a level that meets or exceeds the above figures, but also must meet certain job criteria standards as well. These standards can be found here.
In addition, the minimum hourly rates for most non-exempt employees will increase on Dec. 31, 2019. These minimum hourly rates vary based on the location of the work, number of employees who work for the employer, the type of industry and/or the type of job.
The minimum hourly wage in New York City increases to $15 per hour for all businesses. The minimum hourly wage for Nassau, Suffolk and Westchester counties will increase to $13 per hour. The minimum wage for other counties in New York state increases to $11.80 per hour. There are different minimum hourly rates for employees in the fast-food industry and employees who receive tips. Information on employees in those professions can be found here.
Fair Labor Standards Act
For those working outside of New York state, the U.S. Department of Labor has released the final rule increasing the standard salary an employee must earn in order to be exempt from being paid overtime under the Fair Labor Standards Act. The new rule increases the standard salary level to a weekly wage of $684 per week ($35,568 for the year), an increase from the current threshold of $455 per week ($23,660 per year). Incentive payments—including commissions—may satisfy up to 10% of the annual standard salary level.
Under the FLSA, non-exempt employees must be paid an overtime rate of at least time-and-a-half for all hours worked above 40 hours a week. The FLSA overtime requirement does not apply to employees whose nature of employment meet the FLSA criteria, receive a salary and that salary meets the minimum threshold set by the DOL. The new salary threshold took effect Jan. 1, 2020.
For more information on the FLSA, access QS90722, titled An overview of the FLSA in the PIA QuickSource library.