On April 23, 2024, the United States Department of Labor (“DOL”) issued a new Rule significantly increasing the salary thresholds for overtime exemptions under the Fair Labor Standards Act (FLSA). The DOL webpage summarizing the new Rule can be found here.
Pursuant to the FLSA, employees who are compensated beyond a certain salary threshold and are employed in a bona fide executive, administrative, or professional capacity are exempt from overtime. These are commonly referred to as the “white collar” exemptions. To qualify for an exemption, an employee generally must meet three tests:
- Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed;
- Be paid at least a specified weekly salary level; and
- Primarily perform executive, administrative, or professional duties, as provided in the DOL’s regulations.
Under the new Rule issued by the DOL, the salary threshold is scheduled to increase on July 1, 2024 and then again on January 1, 2025. The salary threshold will then be updated on July 1, 2027 and every three years thereafter, to amounts that will be determined based upon available data and the methodology used by the DOL at those times. In addition to the white collar exemptions, the Rule also significantly increases the salary thresholds for the highly compensated employee exemption. The following chart outlines the schedule of increases/updates:
| Date | White Collar Threshold | Highly Compensated Employee Threshold |
| Current | $684 per week (equivalent to $35,568 per year) | $107,432 per year, including at least $684 per week paid on a salary or fee basis. |
| July 1, 2024 | $844 per week (equivalent to $43,888 per year) | $132,964 per year, including at least $844 per week paid on a salary or fee basis. |
| January 1, 2025 | $1,128 per week (equivalent to $58,656 per year) | $151,164 per year, including at least $1,128 per week paid on a salary or fee basis. |
| July 1, 2027, and every 3 years thereafter | To be determined | To be determined |
In addition to the FLSA, the New York State Labor Law (“NYSLL”) establishes its own overtime requirements and exemptions. Where the provisions of the FLSA and NYSLL overlap, the provisions that provide the greater benefits to the employee apply. Alternatively, the FLSA may fill in gaps where the NYSLL remains silent, and vice versa.
As such, it should be noted that while the increases to the salary thresholds for the white collar exemptions under the FLSA are significant, New York State Department of Labor Regulations have already established significantly higher salary thresholds in order for employees to qualify for the executive and administrative overtime exemptions[1] under the NYSLL. As such, the increases to the salary thresholds for the white collar exemptions under the FLSA will have no impact for many categories of employees in New York, as those thresholds were already higher under the New York State Department of Labor Regulations.
The following chart outlines the salary thresholds for the executive and administrative overtime exemptions under the New York State Department of Labor Regulations.
| Date | New York City, Westchester, and Long Island | The Rest of New York State |
| January 1, 2024 | $1,200 per week (equivalent to $62,400 per year) | $1,124.20 per week (equivalent to $58,458.40 per year) |
| January 1, 2025 | $1,237.50 per week (equivalent to $63,350 per year) | $1,161.65 per week (equivalent to $60,405.80 per year) |
| January 1, 2026 | $1,275 per week (equivalent to $66,300 per year) | $1,199.10 per week (equivalent to $62,353.20 per year) |
The overtime requirements of the NYSLL do not apply to employees who qualify for the executive, administrative, or professional exemptions under the New York State Department of Labor Regulations. In addition, the following employees are exempt from the NYSLL overtime requirements: (a) Outside salespeople; (b) Individuals Working for a Federal, State, or Municipal Government; (c) Farm Laborers; (d) Certain Volunteers, Interns and Apprentices; (e) Taxicab drivers; (f) Members of Religious Orders; (g) Certain Individuals Working for Religious or Charitable institutions; (h) Camp Counselors; (i) Individuals Working for a Fraternity, Sorority, Student or Faculty Association; (j) Part-time Baby Sitters.
Employees employed by charter schools, private schools, not-for-profit corporations, and in non-instructional positions for public school districts, are not exempt from the NYSLL overtime requirements unless they qualify for the executive, administrative, or professional exemptions under the New York State Department of Labor Regulations.
Given the foregoing, the impact of the increases to the salary thresholds to the white collar exemptions under the FLSA will be limited to certain categories of employees in New York, such as employees who would otherwise qualify for the professional exemption under the FLSA and NYSLL, and employees of federal, state, or municipal government(s).
If you have any questions regarding the new Rule, this Legal Alert or require further assistance with this topic, please contact one of our Labor Relations & Employment Law attorneys.
[1] While there is a professional exemption under the New York State Department of Labor Regulations, there is no salary threshold for said exemption.
