Updates to Federal Overtime Rule and New York State Wage and Hour Law

You have probably seen or read the news that the U.S. Department of Labor has announced a final rule updating the minimum salary thresholds necessary to exempt executive, administrative and professional employees from the Fair Labor Standards Act (FLSA) minimum wage and overtime pay requirements. In the federal final rule, effective January 1, 2020 the standard salary level will increase to $684 per week equivalent to $35,568 per year for a full-year worker (2080 hours). This will make about 1.3 million American workers newly eligible for overtime pay.

However, in 2016 New York State’s Department of Labor implemented a wage and salary schedule that outpaces the U.S. minimum wage and salary thresholds. Each year, on December 31, the minimum wage and minimum salary thresholds will follow the schedule below until 2021 (based on regional location).

*Starting 2021, annual increases will be published by the New York State Commissioner of Labor on or before October 1st of each year. Any new increases or adjustments will be based on percentage increases determined by the Director of the Division of Budget, based on economic indices, including the Consumer Price Index (CPI).

Complying with the Federal and State Regulations
Generally, most employees of not-for-profit organizations are covered under the Minimum Wage Act and organizations with covered employees must comply with the wage and hour requirements under this law. However, employees of a government entity (defined by the DOL as Federal, State, County, City, Village, Town, School Districts and sub-School Districts, except for individuals working in any non-teaching job for a school district or board of cooperative educational services (BOCES)), are not covered under New York State’s minimum wage law.

While most not-for-profit employers have to comply with the minimum wage and salary thresholds set forth by New York State, they also need to comply with the U.S. Department of Labor FLSA's overtime exemption regulations.

A commonly asked question: “which regulation overrides the other?” My guidance to employers is to review the minimum salary threshold first, because regardless if an employee’s duties meets the FLSA exemption, if their weekly pay is below New York State’s minimum salary threshold the employee should be classified as non-exempt.  As an example, if the Operations Manager of your small not-for-profit organization meets the duties of an executive under the FLSA, but their weekly pay is less than New York State’s minimum salary threshold of $885, this employee should be classified as a non-exempt employee and they will be eligible for overtime pay under New York State’s minimum wage law.

The links in this article should provide you with more information.  Human Resources consultation and support is also available through CCSI’s Business Management Services with experienced and credentialed Human Resources practitioners to help you navigate through the complexities of employment regulations and maintain compliance.

For more information, please contact Barbara Marianetti DesRosiers at 585-341-2208 or bmarianetti@ccsi.org.

Barbara Marianetti DesRosiers
Chief Human Resources Officer
Coordinated Care Services, Inc.