There Ain’t No Cure For Those Overtime Exemption And Minimum Wage Blues

Remember all that angst two years ago over the U.S. Department of Labor’s new overtime rules that almost resulted in employers paying overtime to previously Exempt employees or substantially increasing their salaries to maintain the exemption? And then that injunction happened and some Presidential election and then everything changed. Whatever happened to that overtime rule?

Earlier this year, the USDOL said that it intended to issue a new rule on the salary threshold for the overtime exemption in October 2018. And we waited by the phone. No call. On October 17, Secretary of Labor Alexander Acosta [is there any chance he’s related to Jim? That would be too weird] announced that the USDOL will not issue a new proposed overtime rule until March 2019. But we’re not good at delayed gratification!

So while we wait for the feds, New York State continues to provide us with lots of new wage and hour regulation to keep us occupied. On December 31, 2018, the NYS salary threshold for the state’s overtime exemption (the equivalent to the fed’s reg but only for NY employers) will jump to $58,500 annually for employers with more than 10 employees in NYC, $52,650 for those with 10 or fewer in NYC, $46,800 in Westchester and Long Island (with continued increases through 2021), and $43,264 upstate (with increases to $48,750 by 2020). This substantially trumps [pun intended] the feds current salary basis threshold of $23,660.

What this means is that if an employee working in NYS, with exempt duties (primarily those with management responsibilities), is earning less than the salary threshold, they will be entitled to overtime for all hours worked over 40 in a work week. The only way to avoid that outcome is to increase the employee’s annual salary to the applicable threshold–or move your business to New Jersey. So if a mid-level manager in NYC is earning $50,000 a year, regardless of the size of the employer, that employee will become eligible for overtime on December 31 unless he/she gets a raise.

Minimum wages are also on the rise just in time for New Years. Starting December 31, 2018, New York City employers with more than 10 employees must pay non-exempt employees no less than $15.00 an hour, employers with fewer than 11 employees must pay a minimum of $13.50. If you were planning a Big Mac attack for New Year’s Eve, you better bring some extra bucks because fast food workers in NYC will also be earning no less than $15.00 an hour starting December 31, 2018. We can’t wait to see what happens to the Dollar Menu.

So although there ain’t no cure in NY for those overtime exemption and minimum wage blues, just load up the ferry and send your employees across the Hudson to Jersey, where we have a lot to be thankful for in this season of giving thanks. The salary threshold for the overtime exemption in New Jersey remains the same as the feds —$23,660, and while the minimum wage will be rising on January 1, 2019…it will only be a mere $8.85.

Enjoy that turkey, stuffing, sweet potatoes, gravy, cranberry sauce (does anyone really eat that?) pies, a nap and some football and from all of us at KH, Happy Thanksgiving!