New Rules on Minimum Wages and Overtime Pay

Co-op and condo board in New York City and the rest of the state need to be aware that the law governing minimum wages and overtime pay has changed. “It will increase wages for many workers in co-ops and condos,” says attorney Beth Norton of Stroock & Stroock & Lavan. “Minimum wages have increased, and fewer people will be considered exempt from overtime pay.”

New York employers have to comply with the following increases in minimum wages: employers in the city with more than 11 non-union employees have to pay at least $11 per hour; city companies with 10 or fewer employees must pay at least $10.50 per hour; the minimum wage in Nassau, Suffolk and Westchester Counties is $10 an hour; in the rest of the state it’s $9.70 per hour.

“Where workers are unionized, employers might not have to worry about any changes,” says Norton. “The unions will not miss this chance to get better wages for their workers. But even if a building has only a few non-unionized employees, they have to comply with the new law.”

The new minimum wages are the easy part of the new law; it gets complicated with the second part, the new overtime wage structure.

According to the Fair Labor Standards Act, workers get paid time-and-a-half if they work more than 40 hours a week. There are, however, certain exemptions from that rule. Exemptions are determined by a three-part test, set forth by the U.S. Department of Labor, all of which must be satisfied for an employee to be considered exempt from overtime requirements.

Part One: Are workers paid on a salary basis and not on an hourly basis? Hourly wages are automatically eligible for overtime pay.

Part Two: Employees who are paid a salary might also be eligible for overtime time pay, depending on their salary. New York passed a regulation that increased the salary threshold, depending on where people work and not where they live. This new salary level threshold for New York City raises the minimum salary from $455 per week to $913 per week, which equals $47,476 per year, to be exempt from overtime eligibility.

The raising of the threshold makes more employees eligible for overtime pay. Even a salaried executive who manages other employees and makes $46,000 a year will be eligible for time-and-a-half overtime pay.

Part Three: What kind of work is eligible for overtime pay? Here it gets complicated. Basically the law says that highly skilled salaried workers might be exempt from overtime pay. However, the key word is “might” and boards are advised to get detailed information from their attorneys when in doubt.

Potentially exempt professions include executives, non-manual administrative employees, learned professionals with advanced knowledge (such as accountants and engineers), and computer employees if they’re skilled workers and earn at least $27.63 per hour.

Only workers who meet all three conditions will be exempt from overtime pay. The Trump administration will not have any influence on the New York State labor laws.

“These laws were supposed to kick in on a federal level in December of 2016,” says Norton. “But a federal judge in Texas stopped that from happening and it is still in the court system. Given this new administration, it’s unlikely the new regulation will stand [nationwide]. However, New York State did pass this regulation in order to increase salary levels.”