Update Applicable to:

All New York employers and multi-state businesses with employees that qualify as a “…bona fide executive, administrative or professional whose earnings are in excess of $900 a week and workers on a farm not connected with a factory.”

What happened?

Effective March 13, 2024, New York Governor Kathy Hochul signed legislation (S.B. 5572) that changes the salary threshold governing various exemptions under Article 6 of the New York Labor Law, raising the minimum salary from $900 to $1,300 per week and adjusting some definitions.

What do employers need to do?

Employers that have employees who met an older salary threshold but no longer meet updated requirements, have two options: (1) Increase the salary or wages of the employee to keep them above the new threshold, or (2) Must begin paying said employees for overtime.

Employers should review the resources provided in order to continue to maintain compliance, like for example, New York Overtime Law, and seek counsel from their trusted employment attorney in order to review and update their respective policies, as well as determine the alternatives that will be in the employers best interest. 

What are the details?

The increased salary ($1,300 now) level will govern exempt status under three subdivisions of Article 6:

• § 190(7), concerning the definition of “clerical and other worker.”
• § 192(2), concerning the requirement to obtain advance consent to pay wages by direct deposit
• § 198-c (3), concerning criminal penalties for failure to pay benefits or other supplemental wages.

The change to Labor Law § 190(7) is definitional rather than substantive, it will have an indirect effect throughout Article 6. Employees who do not meet this increased threshold would lose this exemption and be subjected to the below requirements, according to Littler:

• Labor Law § 191: Frequency of Pay 
• Labor Law §192: Cash Payment of Wages 
• Labor Law §198-c: Benefits and Wage Supplements 
• 12 NYCRR Part 192: Methods of Payment of Wages 

Several notable provisions exclude employees working in a “bona fide executive, administrative or professional capacity whose earnings are in excess of one thousand three hundred dollars a week.”

Salary levels are currently $1,125/week ($58,500/year) in New York City and Nassau, Suffolk, and Westchester Counties, and $1,064.25/week ($55,341/year) elsewhere in the State. Thus, certain individuals may be deemed exempt “executive,” “administrative” or “professional” employees for purposes of some provisions of the Labor Law but not others, depending on their salary level.

Unless and until the two salary levels are harmonized, employers will need to be aware of the two varying thresholds to stay in compliance with their Labor Law obligations.

For more information, please see the links below:

Law Firm Articles: Article 1, Article 2

Firm: Article 1

Bill S5572

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