New York is among a number of states implementing minimum wage increases for 2017; however, New York also increased the minimum salary levels needed to be considered exempt from overtime pay requirements under state law.

On December 28, 2016, the New York State Department of Labor (NYSDOL) adopted its proposed wage orders regarding increases to the minimum wage for non-exempt employees and salary thresholds for exempt employees, which can be found here. The proposed wage orders went into effect on December 31, 2016. The wage orders have different minimum wage and salary requirements throughout the state; and the requirements for employees working in New York City are based on the size of the employer. The wage orders implement incremental increases over the next four years.

Non-Exempt Employees

For non-exempt employees, the minimum wage increases significantly surpass the current federal minimum wage of $7.25 an hour. Within the next three years, the minimum wage for all New York City employees will be $15.00 an hour, while the surrounding counties follow a more staggered implementation schedule:

  Employers of 11 or more employees in New York City Employers of 10 or fewer employees in New York City Nassau, Suffolk, and Westchester Counties The remainder of the State
Effective December 31, 2016 $11.00 per hour $10.50 per hour $10.00 per hour $9.70 per hour
Effective December 31, 2017 $13.00 per hour $12.00 per hour $11.00 per hour $10.40 per hour
Effective December 31, 2018 $15.00 per hour $13.50 per hour $12.00 per hour $11.10 per hour
Effective December 31, 2019 n/a $15.00 per hour $13.00 per hour $11.80 per hour
Effective December 31, 2020 n/a n/a $14.00 per hour $12.50 per hour
Effective December 31, 2021 n/a n/a $15.00 per hour n/a

The wage orders also implement a schedule increasing various allowances over the next several years (e.g., meals, uniforms, tip credit). Employers who operate in industries where allowances are routinely used should be mindful of these changes. Employers operating in the building service and hospitality industries should also be mindful of industry-specific changes to the minimum wage and allowances.

Exempt Employees

Following are the minimum salary increases for exempt executive and administrative employees:

  Employers of 11 or more employees in New York City Employers of 10 or fewer employees in New York City Nassau, Suffolk, and Westchester Counties The remainder of the State
Effective December 31, 2016 $825.00 per week $787.00 per week $750.00 per week $727.50 per week
Effective December 31, 2017 $975.00 per week $900.00 per week $825.00 per week $780.00 per week
Effective December 31, 2018 $1,125.00 per week $1,012.00 per week $900.00 per week $832.00 per week
Effective December 31, 2019 n/a $1,125.00 per week $975.00 per week $885.00 per week
Effective December 31, 2020 n/a n/a $1,050.00 per week $937.50 per week
Effective December 31, 2021 n/a n/a $1,125.00 per week n/a

Recommendations

Employers with multiple locations throughout New York should be familiar with the different applicable minimum wage and salary thresholds for each location.

All employers (except hospitality industry employers) must comply with the Wage Theft Prevention Act’s notice requirements to notify employees impacted of their new minimum wage and salary thresholds. Notice is not required for hospitality industry employers where there is an increase in the rate of pay and the new rate is shown on the next payment of wages. More information on these notice requirements can be found here.

All employers should also display the new minimum wage posters, available on the NYSDOL’s website. Employers should refer to the NYSDOL’s website and consult with counsel for additional guidance in implementing these changes.