NY Employers: Salary Basis Thresholds Increased for 2024

New York recently raised the minimum salary basis thresholds for executive and administrative employees in order to satisfy the exemption from overtime, not to be confused with the separate upcoming increases to salary threshold for the purposes of pay frequency.

Quick Hits

• The New York State labor department approved new minimum salary thresholds for exempt executive and administrative workers for the next three years.
• Effective Dec. 31, 2023, the new minimums are $1,200 per week in New York City and Nassau, Suffolk and Westchester counties, and $1,124.20 per week for the rest of the state.
• Coming on March 13, the salary thresholds for exemptions from pay frequency laws will jump from $900 per week to $1,300 per week.

Salary Thresholds for Overtime Exemptions

On Dec. 27, 2023, the New York State Department of Labor (NYDOL) published a notice of adoption in the New York State Register increasing the minimum salary thresholds for exempt executive and administrative employees to $1,200 per week (approximately $62,400 per year) for New York City and its surrounding counties and $1,124.20 per week (approximately $58,458.40 per year) for the rest of the state. Under the new regulations, the thresholds will gradually increase each year through 2026.

Separately, the New York Legislature amended the New York Labor Law (NYLL) to increase the salary threshold for exemptions from pay frequency laws for executive, administrative and professional employees from $900 to $1,300 per week effective March 13.

The increased executive and administrative employee salary thresholds come as New York’s minimum wage rose on Jan. 1, to $16 per hour for New York City and the remainder of downstate (Nassau, Suffolk and Westchester counties) and $15 per hour for the rest of the state.

Executive and Administrative Employees

Under Section 142-2.14 of the New York Codes, Rules, and Regulations (NYCRR), employees who work in an “[e]xecutive” or “administrative” capacity and who are paid a “salary” not less than the thresholds set by state regulations may be exempt from the state’s overtime pay requirements. The NYDOL has set yearly increases to those thresholds for the next three years starting in 2024 as follows:

New York City and the rest of “downstate” (Nassau, Suffolk, and Westchester counties):

• $1,200 per week ($62,400 per year) on Jan. 1, 2024.
• $1,237.50 per week ($64,350 per year) on Jan. 1, 2025.
• $1,275 per week ($66,300 per year) on Jan. 1, 2026.

The rest of New York State (areas outside of New York City and Nassau, Suffolk and Westchester counties):

• $1,124.20 per week ($58,458.40 per year) on Jan. 1, 2024.
• $1,161.65 per week ($60,405.80 per year) on Jan. 1, 2025.
• $1,199.10 per week ($62,353.20 per year) on Jan. 1, 2026.

Professional Employees

Employees who “[w]ork in a bona fide … professional capacity” may also be exempt if they meet the specific requirement of Section 142-2.14 of the NYCRR, which does not include specific salary thresholds for individuals like those working in an executive or administrative capacity. The new NYDOL regulations do not change those rules.

The federal minimum for exempt professional employees under the Fair Labor Standards Act is $684 per week or $35,568 per year. That minimum remained flat for 2024, but the U.S. Department of Labor published a proposed rule in August 2023 that would significantly raise the minimum weekly salary to $1,059 per week, which is equivalent to $55,068 per year. The proposed rule has not been finalized.

Separate Salary Threshold Increase for Pay Frequency

New York also increased the salary thresholds for employees working in a bona fide executive, administrative or professional capacity for purposes of wage protections under Article 6 of the NYLL from $900 to $1,300 per week, effective on March 13, 2024. The purpose of these thresholds, which are different from the above overtime exemption thresholds, is to create an exemption from the Article 6 requirements regarding pay frequency, consent for direct deposit, and the timing of other benefits and wage supplements for executives and administrative and professional employees.

Related to pay frequency, New York law requires “manual workers”—a term broadly defined by the NYDOL—to be paid at least weekly. Other employees who do not meet the executive, administrative and professional salary exemptions and other nonmanual employees must be paid at least semimonthly. There has been a significant increase in pay frequency litigation, including class/collective actions.

Next Steps

Employers may want to review their payroll practices in light of the increases to the salary thresholds for exempt employees, as well as the state’s new minimum wages. Further, given the increase in litigation, employers may also want to review their pay frequency practices.

Joseph B. Cartafalsa and Zachary V. Zagger are attorneys with Ogletree Deakins in New York City. © 2024 Ogletree Deakins. All rights reserved. Reposted with permission.