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Many New York Employees May Be Legally Entitled to a Raise

In the last few months, I have been inundated by questions from my New York clients about the new sexual harassment training and policy requirements. There has been little press, however, about the rising minimum wage rates and the new minimum salary needed to maintain the executive and administrative exemptions from overtime pay. Just in case you might not have gotten the “memo,” this is what you need to know:

First, the New York state minimum wage will rise on December 31, 2018. The amount of the increase will depend on where the employee works and the size of the employer. For employees working for “Big Employers” (Note: You are “Big” if you have 11 or more employees) in New York City, the minimum wage will rise to $15.00. Employees working for “Small Employers” in the Big Apple will be entitled to a minimum wage of $13.50. Employees working in nearby Long Island and Westchester will be entitled to a minimum wage of $12.00. Employees working anywhere else in the state of New York will be entitled to a minimum wage of $11.10.

But perhaps more important than the rising minimum wage is the increase in the minimum base salary that must be paid to employees who are exempt under the executive and administrative exemptions. You may recall that when the Obama administration attempted to raise the minimum salary for exempt employees to maintain their exemption from $23,660 to $47,476 several years ago, many employers jumped the gun and raised salaries for exempt employees making less than $47,476, to ensure that they would remain exempt. These raises ultimately proved unnecessary when a Texas federal court found the regulation invalid.

New York state overtime law is more generous than federal overtime law. Big Employers in New York City (again, those with 11 or more employees) will be required by New York law to pay exempt employees a minimum salary of $58,500, starting on December 31, 2018. Small Employers, employers on Long Island and in Westchester, and the remaining employers in New York, will have to pay a minimum of $52,650, $46,800, and $43,264, respectively.

Failure to pay the minimum base salary could make an employer liable for any overtime that the previously exempt employee had worked, as well as an equal amount of liquidated damages, not to mention attorney’s fees and costs. Thus, a “Big” New York City company that is paying a supervisor a $51,000 salary will need to decide whether to give that employee a nearly 15 percent raise or start paying her overtime. Although both options may be costly, doing neither may be far more expensive.

 General Minimum Wage Schedule
Location 12/31/17  12/31/18 
NYC – Big Employers (of 11 or more) $13.00  $15.00 (+$2.00) 
NYC – Small Employers (of 10 or less) $12.00 Long Island & Westchester $13.50 (+ $1.50)
Long Island & Westchester  $11.00  $12.00 (+ $1.00)
Remainder of New York State Workers $10.40  $11.10 (+ $.70) 



This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.