Category: Overtime

2020 New York Minimum Wage

2020 New York Minimum Wage

Do you know the 2020 New York minimum wage? Employers must be ready before the end of the year to meet the new requirements.

The 2020 New York minimum wage rates are shaded in blue in the tables below. Note that the changes take effect on the last day of the year, not January 1st.

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Standard New York Minimum Wage

The 2020 New York minimum wage varies by geographic location, employer size (where applicable), and sometimes by industry.

For most private employers, the 2019 New York minimum wage in the following chart applies. This chart also applies for non-teaching employees of public school districts or a BOCES. However, there is no New York minimum wage for other employees of public (governmental) employers (but the federal minimum wage of $7.25 does apply).

General Minimum Wage Rate Schedule
Location12/31/1812/31/1912/31/2012/31/21
NYC – Large Employers (of 11 or more)$15.00$15.00
NYC – Small Employers (10 or less)$13.50$15.00
Long Island & Westchester$12.00$13.00$14.00$15.00
Remainder of New York State$11.10$11.80$12.50TBD*

* Annual increases for the rest of the state will continue until the rate reaches a $15 minimum wage. Starting in 2021, the annual increases will be published by the Commissioner of Labor by October 1. They will be based on percentage increases determined by the Director of the Division of Budget, based on economic indices, including the Consumer Price Index.

Minimum Wage for Tipped Employees in the Hospitality Industry

New York State has separate minimum wage rules for employees in the hospitality industry. These rules apply to businesses running a restaurant or hotel.

The minimum wage rates for most non-tipped employees in the hospitality industry are set as per the schedule above. However, employers may count a portion of certain tipped employees’ gratuities toward the minimum wage requirements. This is known as a “tip credit.”

New York State has two separate cash wage and tip credit schedules for tipped hospitality employees who qualify as “food service workers” and “service employees.”

Food Service Workers

A food service worker is any employee who is primarily engaged in serving food or beverages to guests, patrons, or customers in the hospitality industry who regularly receive tips. This includes wait staff, bartenders, captains, and busing personnel. It does not include delivery workers.

Hospitality Industry Tipped Minimum Wage Rate Schedule (Food Service Workers)
Location12/31/1812/31/1912/31/2012/31/21
NYC – Large Employers
(of 11 or more)		$10.00 Cash

$5.00 Tip

$10.00 Cash

$5.00 Tip

NYC – Small Employers
(10 or less)		$9.00 Cash

$4.50 Tip

$10.00 Cash

$5.00 Tip

Long Island & Westchester$8.00 Cash

$4.00 Tip

$8.65 Cash

$4.35 Tip

$9.35 Cash

$4.65 Tip

$10.00 Cash

$5.00 Tip

Remainder of New York State$7.50 Cash

$3.60 Tip

$7.85 Cash

$3.95 Tip

$8.35 Cash

$4.15 Tip

Service Employees

The next schedule applies to other service employees. A service employee is one who is not a food service worker or fast food employee who customarily receives tips above an applicable tip threshold (which also follows schedules, not shown here).

Hospitality Industry Tipped Minimum Wage Rate Schedule (Service Employees)
Location12/31/1812/31/1912/31/2012/31/21
NYC – Large Employers
(of 11 or more)		$12.50 Cash

$2.50 Tip

$12.50 Cash

$2.50 Tip

NYC – Small Employers
(10 or less)		$11.25 Cash

$2.25 Tip

$12.50 Cash

$2.50 Tip

Long Island & Westchester$10.00 Cash

$2.00 Tip

$10.85 Cash

$2.15 Tip

$11.65 Cash

$2.35 Tip

$12.50 Cash

$2.50 Tip

Remainder of New York State$9.25 Cash

$1.85 Tip

$9.85 Cash

$1.95 Tip

$10.40 Cash

$2.10 Tip

Fast Food Minimum Wage

Non-exempt employees at some “fast food” restaurants are subject to an alternative minimum wage schedule.

This schedule applies to employees who work in covered fast food restaurants whose job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.

These special New York minimum wage rates only apply to fast food restaurants that are part of a chain with at least 30 restaurants nationally.

Fast Food Minimum Wage Rate Schedule
Location12/31/1812/31/1912/31/207/1/2021
New York City$15.00 $15.00
Outside of New York City$12.75$13.75 $14.50 $15.00

Note: No tip credit is available for fast food employees.

Overtime Threshold

Along with increases to the 2019 New York minimum wage, the salary requirement to maintain some overtime exemptions will also increase.

The salary threshold for New York’s executive and administrative exemptions go up on December 31st. These amounts are all higher than the federal Fair Labor Standards Act (FLSA) threshold, which will increase from $455/week to $684/week on January 1, 2020. But most New York employers (other than governmental entities) must satisfy the higher New York threshold to ensure full overtime exemption.

There is no salary requirement for New York’s professional exemption. But employers must also satisfy the FLSA threshold for most professional employees. Doctors, lawyers, and teachers do not have a salary requirement for exemption.

Executive & Administrative Exemption Weekly Salary Threshold Schedule
Location12/31/1812/31/1912/31/2012/31/21
NYC – Large Employers (of 11 or more)$1,125.00$1,125.00
NYC – Small Employers (10 or less)$1,012.50$1,125.00
Long Island & Westchester$900.00$975.00$1,050.00$1,125.00
Remainder of New York State$832.00$885.00$937.50TBD*

Prepare Now for the 2020 New York Minimum Wage

New York employers should review their compensation levels and make necessary changes by December 31, 2019. This might result in increasing an employee’s hourly wage or salary or reclassifying exempt employees to non-exempt if they will no longer meet the exemption salary requirement.

And, remember, the 2020 New York minimum wage rates only last one year in many cases. Companies will have to review this again next year.

To keep up on New York and federal wage and hour requirements and other employment law topics, you can sign up for our email newsletter here or follow us on LinkedIn!

Federal Overtime Rules

Federal Overtime Rules Won’t Change Much in New York

On September 24, 2019, the U.S. Department of Labor finalized long-awaited changes to the federal overtime rules. The rules increase the salary requirement for the most common overtime exemptions. The higher threshold applies throughout the United States, but it does not trump most state overtime requirements. New York already has higher salary requirements for most of its overtime exemptions. Thus, the federal changes won’t force most New York employers to raise wages.

“White Collar” Exemptions

The Fair Labor Standards Act (FLSA) is a federal law requiring employers to pay minimum wage and overtime. Most employees must receive overtime for working over 40 hours in a week. Some exceptions apply. The most prevalent ones are the “white collar” exemptions.

The “white collar” exemptions include the administrative, executive, professional, and outside sales exemptions. All but the outside sales exemption have minimum salary requirements.

To qualify for the administrative, executive, and professional exemptions, most employees must satisfy both duties and salary requirements. (There is no salary requirement for doctors, lawyers, and teachers under the FLSA professional exemption.)

2020 Federal Overtime Rules

Beginning January 1, 2020, the weekly salary requirement for the FLSA administrative, executive, and professional exemptions will increase from $455 to $684. The new threshold is slightly higher than the $679 level first proposed earlier this year. However, it is much lower than the $913 level that the DOL tried to implement under President Obama in 2016.

Nondiscretionary Bonuses and Incentive Payments

Although the salary requirement has always been measured on a weekly basis, there is now a slight exception. For the first time, the new federal overtime rules will allow employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the salary requirement. Employers can review compliance on an annual basis and make a year-end “catch-up” payment if necessary.

Employers can determine the relevant 52-week period (measured consecutively), but must do so in advance. Otherwise, the calendar year is the default. They must make any necessary catch-up payment within one pay period after the end of the chosen 52-week period.

The total 52-week “salary” requirement is $35,568. Of that, up to $3,556.80 could be satisfied by bonuses or other incentive compensation.

Employers may pro-rate the requirement for employees who do not work the entire 52-week period. If an employee leaves employment the employer would need to ensure compliance and make any catch-up payment within one pay period after the end of employment.

Highly Compensated Employees

The FLSA’s special “highly compensated employee” exemption currently requires that the employee receive at least $100,000 in total compensation in a year.

The new federal overtime rules increase that to $107,432 in total annual compensation. The employee must receive at least $684 in salary on a weekly basis.

Earlier this year, the U.S. DOL proposed increasing this threshold much higher to $147,414. By comparison, the 2016 rule would have required annual compensation of at least $134,004.

The “highly compensated employee” exemption applies where the employee meets the compensation threshold and also performs at least one of the duties of an exempt executive, administrative, or professional employee. Most employees who qualify for this exemption would also be eligible for the full executive, administrative, or professional exemption anyway. So there may be relatively few situations where employers really need to increase compensation to maintain this special exemption.

New York’s Overtime Exemptions

The minimum wage varies throughout New York State based on geographic location, among other factors.

Click here for complete charts on the various New York minimum wage rates and overtime exemption salary levels.

For most occupations, the current New York minimum hourly wage ranges from $11.10 for Upstate workers to $15.00 for some employees in New York City.

New York has overtime pay rules that are similar to those found in the FLSA. These include similar exemptions, such as the administrative, executive, and professional exemptions.

New York’s administrative and executive exemptions already require that employees receive a salary higher than $684 per year. However, unlike the FLSA, New York’s professional exemption does not have a salary requirement. That means that some exempt professionals might need a raise to stay exempt in 2020.

A Caveat for Public Employers in New York

Most New York employers are subject to both the federal FLSA and the similar New York State laws.

However, the New York minimum wage and overtime rules don’t apply to governmental entities in the State, with limited exceptions. But the FLSA does.

So, public employers in New York will need to review the federal overtime rules to evaluate the potential impact on their workforces. Most public employees in New York eligible for exemptions already make more than $684 per year. But some, including part-time exempt employees, do not. (The FLSA salary requirement does not decrease for part-time employees.) Preserving exemptions for part-time employees may or may not be important, depending on whether they ever work over 40 hours in a week, which would trigger FLSA overtime obligations.

Act Soon, If Necessary

If you have employees in states where the new federal salary requirement exceeds the applicable state exemption threshold, then you need to be prepared to make changes by January 1, 2020. You will either need to increase compensation or remove the exemption and pay overtime where earned.

In New York, the new federal overtime rules only affect some public employers and professional employees. Most private-sector employers, including non-profits, will just need to focus on maintaining exemptions under New York law.

 

The full notice of the new FLSA regulations is available here:

Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees

Proposed FLSA Rules New York

Will Proposed FLSA Rules Affect New York?

On March 22, 2019, the U.S. Department of Labor formally published proposed FLSA rules that would increase the salary level for key exemptions from federal minimum wage and overtime requirements. We discussed the DOL’s proposal in an earlier post when they were first publicized. The rules would require employers to pay employees at least $679 weekly ($35,308 per year) to preserve the exemptions. However, New York law already sets a higher salary threshold for similar exemptions. But that does not mean the federal proposal won’t have an impact in the Empire State.

In case you don’t want to read further to see whether these nuances affect your organization, here’s the quick summary:

  1. The proposed FLSA rules are more likely to affect governmental employers in New York than those in the private sector.
  2. Exempt “professionals” (other than doctors, lawyers, and teachers) would now have a higher salary requirement under the FLSA than under New York State law.

New York Has Its Own Rules

New York is among the states with the highest minimum wages in the U.S. The minimum wage now varies throughout New York State based on geographic location, among other factors.

Click here for complete charts on the various New York minimum wage rates and overtime exemption salary levels.

For most occupations, the current New York minimum hourly wage ranges from $11.10 for Upstate workers to $15.00 for some employees in New York City.

In addition to the State minimum wage, New York also has overtime pay rules that are similar to those found in the FLSA. These include similar exemptions, such as the administrative, executive, and professional exemptions that the proposed FLSA rules would alter.

New York’s administrative and executive exemptions also require that employees receive a sufficient salary. In 2019, the weekly salary thresholds for these exemptions range from $832 to $1,125. Thus, New York’s requirements already exceed the $679/week level in the newly proposed FLSA rules.

But the State Rules Don’t Apply to All New York Employees

First, let’s be clear, most New York employers are subject to both the federal FLSA and the similar New York State laws. That is, employers must satisfy both. Neither trumps the other.

However, not every workplace comes under the coverage of both federal and state minimum wage and overtime laws. And the primary distinction is perhaps counterintuitive.

Generally speaking, the FLSA applies to all but the smallest employers across the United States, including New York. This includes both the private sector and the government.

By contrast, the New York minimum wage and overtime rules don’t apply to governmental entities in the State, with limited exceptions. In other words, New York villages, towns, counties, school districts, and public authorities, as well as the State itself, don’t have to follow the New York laws with respect to most employees. But they do have to comply with the FLSA. (One narrow exception, for example, is non-instructional employees of public school districts, who are subject to the State requirements as well as the FLSA.)

New York Public Employers Must Heed the Proposed FLSA Rules

New York State and its municipalities and other public entities could currently have exempt employees making less than the $35,308 per year the proposed FLSA rules would require. The current FLSA requirement is just $455 per week, or $23,660 annually.

So, public employers in New York will need to review the proposed FLSA rules to evaluate the potential impact on their workforces. Although most full-time public employees in New York probably already make at least $679 per week, some part-time exempt employees at least do not. And the FLSA salary requirement is not pro-rated for part-time employees. Preserving exemptions for part-time employees may or may not be important, depending on whether they ever work over 40 hours in a week, which would trigger FLSA overtime obligations.

The DOL’s current proposals also affect a special “highly-compensated employee” exemption. Right now, that exemption requires that the employee receive at least $100,000 in total compensation in a year. The proposed FLSA rules increase that almost to $147,414. Many New York public employers have exempt employees falling within that range. This does not mean that all of them must receive a raise, however. Many would probably also qualify for other exemptions with the lower $35,308 salary requirement.

Moreover, unlike the private sector, even supervisory employees working for public employers in New York can unionize. This increases the likelihood that exempt employees might be subject to collective bargaining agreements. If so, then changes to the terms and conditions of their employment, including compensation, might need to be negotiated with their union. Governmental entities in this situation should allow additional time to do what is necessary to come into compliance with the proposed FLSA rules by the time the DOL finalizes them–likely later this year.

The Peculiar Case of the Professional Exemptions

The proposed FLSA rules pertain to three of the so-called “white collar” exceptions to federal overtime laws: the administrative, executive, and professional exemptions. (Click the corresponding link in the previous sentence for more on these exemptions and their New York State counterparts.)

Under the FLSA, all three of these exemptions have salary components. Not so under New York law.

New York’s administrative and executive exemptions do have salary requirements. Its professional exemption does not.

Thus, New York employers only have to satisfy the FLSA salary level to exempt qualifying professional employees. This group includes both “learned” professionals like accountants and engineers and artistic professionals like painters and musicians. So, the proposed FLSA rules might require employers to pay some of these individuals more to preserve the professional exemption.

As one final caveat, the FLSA has a further special exception for doctors, lawyers, and teachers. The salary requirement does not apply to these professionals, assuming they’re working in their licensed fields. The proposed FLSA rules don’t make any changes applicable to those employees.

Proposed Rules Are Not Final Yet

Keep in mind that we’re still only talking about proposed changes to the FLSA overtime exemption rules. The public has until May 21, 2019, to submit comments on the proposals. Then the DOL will have to review them and prepare “final” rules. Though there is a reasonable chance the final rules will closely mirror the current proposals, something might change. And the impact on New York workplaces could differ from that described here.

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