In the waning hours of 2016, new regulations went into effect that substantially increase the minimum salary an employee must have in order to be classified as exempt from the overtime provisions of the New York Labor Law. Employees whose salaries are below the new thresholds must be properly classified as nonexempt.

On Dec. 28, 2016 – just three days before the new rules became effective – the New York State Department of Labor (“NYSDOL”) published a Notice of Adoption of amendments, originally proposed on Oct. 19, 2016, to the rules governing the minimum salary requirements for exempt employees. The amendments, which increase salary thresholds for New York state employers based on number of employees and location, were thought to be irrelevant because the federal salary thresholds for white collar exemptions were set to increase to higher levels on Dec. 1, 2016. With the amendments to the federal regulations on hold pending litigation (as we reported in our last alert), the NYSDOL adopted its rule on Dec. 28, 2016 – three days before its effective date.

In connection with the new rule, exempt employees working in New York City must receive an annual salary in 2017 of at least $42,900 for employers with 11 or more employees and $40,950 for employers with 10 or fewer employees. This represents a significant increase from the previous minimum salary in effect in New York, which was $35,100 throughout the state. The new thresholds are lower outside New York City, but in all cases are higher than they were prior to the Dec. 31 amendments. The minimum salary requirements will increase on an annual basis, in some parts of the state, through Dec. 31, 2021. The NYSDOL’s website contains an FAQ list, the salary thresholds for various counties and the schedule of increases.