The US Dept. of Labor Issues Final Rule that Will Increase the Minimum Salary Threshold

Effective January 1, 2020, employees must be paid $684/week (equating to $35,568/year) on a salary basis in order to qualify as an exempt employee under the FLSA white collar exemptions. The minimum salary threshold for the “highly compensated employee exemption” is also going up. Effective January 1, 2020, in order to take advantage of the “highly compensated employee exemption,” the employee will need to be paid a salary of at least $107,432/year.

Q: Do these changes affect NY employees/employers?

A: New York currently recognizes exemptions for the following positions which are also exempt under the FLSA: 1) executive employees, 2) administrative employees, 3) professional employees, 4) outside salespeople, 5) individuals working for a federal, state, or municipal government, 6) farm laborers, 7) certain volunteers, interns and apprentices, 8) taxicab drivers, 9) members of religious orders, 10) certain individuals working for religious or charitable institutions, 11) camp counselors, 12) individuals working for a fraternity, sorority, student or faculty association, and 13) part-time baby sitters.

For executive and administrative employees, New York has set a higher minimum salary level than the FLSA. Depending on an employer’s size and location, the minimum salary level in NY for these employees ranges from $832/week to $1,125/week. Therefore, the increased minimum salary thresholds under the FLSA will not affect executive and administrative employees.  The increased minimum salary FLSA thresholds will affect employees who fall under other exemptions in New York. For example, exempt employees under the professional exemption are not subject to a New York salary threshold. However, they will still be subject to the FLSA threshold. Where the state and federal government vary in their minimums, the higher standards will prevail.

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