Despite Federal Injunction, New York State Department of Labor Proposal to Increase Overtime Exempt Salary Thresholds Likely to be Enacted

Legal Alert

December 5, 2016

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On December 1st, the U.S. Department of Labor (DOL) filed an appeal of the recent decision by the United States District Court for the Eastern District of Texas to enter a nationwide preliminary injunction blocking the DOL from implementing changes to the Fair Labor Standards Act it announced back in May 2016. As explained in a prior SGR Client Alert,these new regulations would have raised the minimum salary level for executive, administrative and professional employee exemptions to $913 per week, or $47,476 per year, more than doubling the current federal minimum salary level of $455 per week, or $23,660 per year. At this point in time, it is unclear what will happen, particularly given that the appeal is expected to be pending when the Trump administration takes office and the new Congress convenes.

Meanwhile, in New York, the uncertainty surrounding the federal injunction will have virtually no effect on employers. This is because the New York State Department of Labor (NYSDOL) recently proposed similar regulations which would incrementally increase the salary requirement thresholds for executive and administrative employees in New York State to amounts comparable to those set forth in the currently enjoined DOL regulations. The NYSDOL regulations are likely to be finalized and would take effect on December 31, 2016. The regulations would increase the salary levels as follows:

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New York employers should take special note of the fact that the new salary thresholds vary by location within the state, and therefore employers will need to apply different salary thresholds depending on the location of their employees.

If the proposed regulations are enacted, New York employers must be sure to carefully monitor these thresholds on an annual basis.

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice. If you have any questions about these issues, please contact your Labor and Employment counsel at Smith, Gambrell & Russell, LLP.