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Prepare for Changes to “Exempt” Employee Status

Attorney Law in NY > Legal Advice  > Prepare for Changes to “Exempt” Employee Status

Prepare for Changes to “Exempt” Employee Status

Under the Federal Labor Standards Act (FLSA), overtime is required to be paid to most employees who work over 40 hours a week, unless such persons fit the rules for “exemption.” There are many FLSA exemptions, which will be the topic of another article. For more information on FLSA categorizations please visit their website.In NYC, there is a minimum salary that must be paid to persons whom an employer wants to classify as “Exempt.” Remember, “Exempt” means the employee is not paid for hours worked over 40. This minimum salary is called the “Salaried Minimum Wage.” The Salaried Minimum Wage is different for employers with 11+ employees than for those with 10 employees or under. As of January 1, 2020, the “Salaried Minimum Wage” is changing for Employers with 10 or fewer employees who operate in NYC.
In 2019, the Salaried Minimum Wage for Employers with 10 or fewer employees in NYC was $52,650, or $1,012.50/week.
This is raising to $58,500 or $1,125.00/week as of 12/31/2019. See New York State Department of Labor. Worker Protection, Minimum Wage, https://www.labor.ny.gov/workerprotection/laborstandards/workprot/minwage.shtm (last visited 11/15/2019).
For Employers in Nassau, Suffolk, and Westchester, in 2019, the Salaried Minimum Wage was $900.00/week or $46,800.00 annually. This is raising to $50,700.00 or $975.00/week as of December 31, 2019. Id.

For Employers outside of the City, Nassau, Suffolk, and Westchester,the Salaried Minimum Wage in 2019 was $43,264.00 annually or $832.00/week. This is raising to $46,020.00 annually, or 832.00/week as of 12/31/2019. Id.
For Employers in Nassau, Suffolk, and Westchester, in 2019, the Salaried Minimum Wage was $900.00/week or $46,800.00 annually. This is raising to $50,700.00 or $975.00/week as of December 31, 2019. Id.

What does this mean for NYC Employers?

  • Employers with 10 or less employees must increase their “Exempt” employee’s wages to match the salaried minimum as of 1/1/2020 or
  • Employers need to re-classify employees who are now under the salaried minimum wage threshold as “Non-Exempt,” and make sure to pay all such employees time-and-a-half for any and all hours worked over 40 hours in a one-week period.

What Steps Must Be Taken?

  1. Employers must identify their Exempt employees and review their current wage rate. Employers must then decide whether to offer an increase in wages or reclassification to those “exempt” employees who will be under the new Salaried Minimum Wage as of 1/1/2020.
  2. Employers must notify the employee of the decision to change the Employee’s wage or FLSA classification. New York State requires that unless notice is provided on the Employee’s wage statement, a written notice of the change must be provided to the Employee. See New York State Department of Labor. Worker Protection, https://labor.ny.gov/formsdocs/wp/ellsformsandpublications.shtm for model notices.

What does this mean for NYC Employers?

By: Tiffany A. Donaldson, Esq.
Donaldson Legal Counseling PLLC
November 15, 2019

What does this mean for NYC Employers?

Citations:
NY State Department of Labor
https://labor.ny.gov/workerprotection/laborstandards/employer/wage-theft-prevention-act.shtm
https://labor.ny.gov/formsdocs/wp/ellsformsandpublications.shtm
(last visited 10/29/2019).

What does this mean for NYC Employers?

This article is information based on New York State laws as of the date of creation.
This article does not constitute legal advice and no attorney-client relationship is created through review of this article. Contact an attorney for individual consultation on minimum wage in NY.