COUNSEL’S CORNER REMINDER: 2018 NEW YORK STATE …
COUNSEL'S CORNER
REMINDER: 2018 NEW YORK STATE MINIMUM WAGE AND
EXEMPT SALARY THRESHOLDS INCREASED
By
Joel A. Klarreich, Esq. Jason B. Klimpl, Esq.
As we are now well into the new calendar year, New York employers, including staffing and direct hire firms, are reminded to comply with the incremental minimum wage increases and corresponding increases to the salary level thresholds for employees to qualify as "exempt" from most New York overtime requirements. As reported in our firm's previous Employment Note, these increases were adopted by the New York State Department of Labor (NYSDOL) in December 2016.
New York Minimum Wage Increases
In 2018, the minimum wage for employees working in New York City for "large" employers (i.e., those with 11 or more employees) increased to $13.00 per hour, and the minimum wage for employees working in New York City for "small" employers (i.e., those with 10 or fewer employees) increased to $12.00 per hour. The full schedule of increases to the New York State hourly minimum wage, including those in regions outside of the City, as well as the increases applicable to the hospitality industry, can be found in our previous Employment Note.
New York Exempt Employee Salary Threshold Increases
In 2018, an employee working in New York City for a "large" employer must earn at least $975 per week to qualify as an exempt executive or administrative employee in New York, and an employee working in New York City for a "small" employer must earn at least $900 per week to qualify as exempt from most overtime requirements. As with the full schedule of New York minimum wage increases, the schedule of New York State-wide increases to the minimum salary thresholds for exempt employees can be viewed in our previous Employment Note.
These salary threshold increases may affect the ability of staffing firms and other employers to classify their recruiters and other internal staff as exempt from overtime, especially given that commissions earned by an employee are generally not counted towards the minimum salary threshold. Accordingly, employers in the staffing industry must carefully consider their compensation options with respect to such staff. For instance, in situations where internal staff receive both base salary and commission, some firms are considering moving a portion of the commission program to a guaranteed draw against commissions model, so that the draw plus the base would reach the threshold, since guaranteed draw would generally count towards the minimum salary threshold.
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Given these latest increases, New York staffing and direct hire firms should be sure their minimum wage rates are up-to-date and that employees classified as exempt from overtime are being paid the requisite minimum salary, in order to avoid severe penalties imposed by the NYSDOL and help mitigate the risk of costly wage and hour litigation. Firms should also confirm that their mandatory workplace posters and notices are updated to reflect the 2018 wage rates.
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