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Federal Judge Blocks U.S. DOL's Expansion of Overtime Eligibility; NYS Overtime Increases May Go Into Effect

As you may know, the U.S. Department of Labor had previously announced a new rule that it claims will extend overtime protections to an estimated 4.2 million workers who are currently exempt. The effective date of the new rule was December 1, 2016. Generally speaking, to qualify for the exemption under the Fair Labor Standards Act, employees were required to meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. The new rule increased the salary level required for the exemption to $913 a week.

After hearing arguments from 21 states and various organizations, U.S. District Court Judge Amos Mazzant recently issued an order blocking the implementation of this rule on a nationwide basis. Among other things, he found that the DOL's new salary level was without statutory authority. It remains to be seen whether the U.S. DOL will appeal this decision.
In any event, employers should note that the standard weekly salary level for the overtime exemption in New York remains at $675 a week. Of additional significance, however, is that in October 2016 the NYS DOL proposed amendments that would increase the minimum salary threshold as follows:

Large Employers of 11 or more employees in New York City

  • $825.00 per week on and after 12/31/16;
  • $975.00 per week on and after 12/31/17; and
  • $1,125.00 per week on and after 12/31/18;

Small Employers of 10 or fewer employees in New York City

  • $787.50 per week on and after 12/31/16;
  • $900.00 per week on and after 12/31/17;
  • $1,012.50 per week on and after 12/31/18; and
  • $1,125.00 per week on and after 12/31/19;

Employers in Nassau, Suffolk and Westchester Counties

  • $750.00 per week on and after 12/31/16;
  • $825.00 per week on and after 12/31/17;
  • $900.00 per week on and after 12/31/18;
  • $975.00 per week on and after 12/31/19;
  • $1,050.00 per week on and after 12/31/20; and
  • $1,125.00 per week on and after 12/31/21;

Employers Outside of New York City, Nassau, Suffolk and Westchester Counties

  • $727.50 per week on and after 12/31/16;
  • $780.00 per week on and after 12/31/17;
  • $832.00 per week on and after 12/31/18;
  • $885.00 per week on and after 12/31/19;
  • $937.50 per week on and after 12/31/20
The NYS DOL has invited public comments to the proposed amendments beginning in December 2016.Since the proposed increases are targeted to go into effect on 12/31/16, there appears to be a very strong likelihood that this will occur.
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