New York State minimum wage rates and the weekly amount that salaried (exempt from overtime) employees need to be paid has been changing annually in December for a number of years now. This year is no exception.
Employers should continuously monitor their employee wage payment obligations, including minimum wage and overtime eligibility, as these change frequently. The consequences of paying employees improperly can be severe, including the possibility of a Department of Labor audit or even a private lawsuit that results in significant damages.
This year’s changes affect employers with employees in “Upstate” New York (which are those employees located outside of New York City, Long Island, and Westchester). Specifically, effective New Year’s Eve, December 31, 2022:
- The minimum wage will increase, and
- The salary threshold for exempt administrative and executive employees may also increase.
These changes are explained in more detail below.
Minimum Wage Increase for Upstate New York Employees
The New York State legislature has been phasing in a $15.00 per hour minimum wage across the state over the last few years. The general $15.00 minimum wage for most employees in New York City was reached at the end of 2019. In Westchester and Long Island (Nassau and Suffolk Counties), the general $15.00 minimum wage was reached at the end of 2021.
However, the gradual phase-in of the $15.00-per-hour minimum wage continues in the rest of New York State and will increase again on December 31, 2022. At that time, employers with employees working in all counties outside New York City, Westchester, and Long Island, must pay minimum wage employees at least $14.20 per hour, up from the current rate of $13.20 per hour.
A table outlining the history of minimum wage increases in New York, and information to determine how much employees must be paid depending on location and employer size, can be found on the Department of Labor’s website.
Potential Increased Salary Threshold for Upstate Exempt Executive and Administrative Employees
The Department of Labor has also proposed a regulation that would increase the salary threshold for many exempt employees in Upstate New York.
As a general rule, employees are entitled to be paid an overtime premium for all hours worked over 40 in a given week. Certain categories of employees, however, are exempt from this general requirement based on their responsibilities, including (among others) executive employees and administrative employees. Employers relying on such exemptions must not only show that the employee’s responsibilities meet the statutory criteria but must also pay the exempt employee a minimum salary that remains generally the same each week regardless of the number of hours worked.
This minimum salary threshold for executive and administrative employees, like the minimum wage, has increased each year in New York since 2016. In keeping with this trend, the New York Department of Labor recently proposed a regulation which, if adopted, will become effective on December 31, 2022 and will increase the minimum salary threshold for exempt executive and administrative employees in Upstate New York from the current rate of $990.00 per week to $1,064.00 a week (or $55,328.00 per year). The proposed regulation, which has not yet been adopted, does not increase the current salary threshold of $1,125.00 per week (or $58,500.00 per year) currently required in New York City, Long Island, and Westchester.
It is important to note that New York’s salary threshold currently is higher than the federal requirement, which is $684.00/week. The higher threshold needs to be paid for NY administrative and executive employees to satisfy the requirements to be exempt from overtime wages.
These increases are part of a broader trend of driving the minimum wage upwards on a state and local level even as the federal minimum wage has remained at $7.25 per hour since 2009. On the New Year in 2023, at least 22 states (including New York) will see the minimum wage increase in at least some localities or for at least some categories of employers.
If your company has employees in multiple locations, be mindful to check whether your wage payment obligations are changing.
Staying abreast of these changing requirements can be a challenge, especially for multi-jurisdictional employers. However, it is imperative that employers monitor all developments in the wage and hour rules applicable to their employees, as the consequences of failing to do so can be severe.