The New York State Department of Labor formally adopted new wage orders today that raise the weekly salary thresholds for exemption as an executive or administrative employee from the current $675 per week ($35,100 annually) to new levels that differ based on employer size and location.

Effective December 31, 2016, the new salary thresholds in New York are as follows:

• New York City: $825 per week ($42,900 annually) for employers with 11 or more employees; $787.50 per week ($40,950 annually) for employers with 10 or fewer employees.
• Nassau, Suffolk, and Westchester counties: $750 per week ($39,000 annually).
• Other parts of New York: $727.50 per week ($37,830 annually).

The weekly salary thresholds will increase annually until the salary threshold reaches $1,125 per week ($58,500 annually) in New York City, Nassau, Suffolk, and Westchester counties and $937.50 per week ($48,750 annually) in other parts of the state. New York City will reach $1,125 per week for employers of 11 or more employees the soonest, by the end of 2018. The new weekly salary thresholds do not apply to exempt professionals (learned or creative); there continues to be no salary threshold for these exempt professionals under New York law.

Employers whose exempt executive and administrative employees are currently paid less than the new salary threshold (based on number of employees and location) must increase those salaries to the new minimum beginning with the paycheck or direct deposit covering December 31, 2016. The salary may not be prorated for the workweek in which December 31 falls, even though the wage orders were not finalized until today, or else the affected employees will lose the exemption for the workweek.

Alternatively, employers may convert exempt employees earning less than the new salary threshold to non-exempt (i.e., overtime-eligible) beginning with the first day of the workweek in which December 31 falls.

Note that the federal Department of Labor overtime rule, recently preliminarily enjoined by a court in the Eastern District of Texas and pending appeal at the Fifth Circuit Court of Appeals, has no impact on the New York increases. Regardless of whether the federal rule ever takes effect, employers with New York employees must comply with these new wage orders.