New York Minimum Wage and Salary Threshold for Exempt Employees Set to Increase at the End of 2020

Seyfarth Synopsis: As they have each year since 2016, the minimum wage and exempt salary threshold will increase for New York employers effective December 31, 2020.

Minimum Wage (2021)

In keeping with the gradual increase in the State’s minimum wage levels, the new tiered rates across the State, effective December 31, 2020, are listed below. Although some elected officials have floated the idea of postponing the effective date of these increases in light of the COVID-19 pandemic, we expect these increases to go into effect as scheduled. 

The increases depend on employer size and location.  The minimum wage rate for New York City employers remains $15 per hour for all employers.

 

Size/Location of Employer	Minimum Wage as of December 31, 2020
New York City, 11 or more employees	$15.00
New York City, 10 or fewer employees	$15.00
Long Island and Westchester employers, regardless of size of employer	$14.00
Remainder of state, regardless of size of employer	$12.50

Along with the increase to the minimum wage, the amounts that employers can deduct from employees’ wages for items such as uniform allowances and meals are also set to change on December 31.  The Department of Labor on its website has summarized the revisions applicable to hospitality employers, employers in “miscellaneous industries,” and employers in the “building service industry.”  Employers should consult these summaries to determine how much they can deduct for a uniform allowance and claim for meal, lodging and tip credits.

Elimination of Subminimum Wage for “Miscellaneous Industries”

Effective December 31, the subminimum wage will be eliminated for employers covered by the “miscellaneous industries” wage order.  The “subminimum wage” is a wage paid by employers that, in combination with the average of tips received by the employees (a “tip credit”), equals or exceeds the state minimum wage.

Effective June 30, 2020, the allowable tip credit for employers covered by the “miscellaneous industries” wage order was reduced by fifty percent.  December 31 marks the complete elimination of the subminimum wage for these “miscellaneous” employers.  The subminimum remains permissible for all other categories of employers to pay tipped workers, including hospitality industry employers (i.e., restaurants and hotels).

Salary Threshold for Exempt Employees (2021)

Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020.  Like the minimum wage, the salary levels depend on employer size and location.  They are as follows:

 

Size/Location of Employer	Salary Threshold as of December 31, 2020
New York City, 11 or more employees	$1,125.00 per week ($58,500.00 per year)
New York City, 10 or fewer employees	$1,125.00 per week ($58,500.00 per year)
Nassau, Suffolk, and Westchester counties, regardless of size of employer	$1,050.00 per week ($54,600.00 per year)
Remainder of State, regardless of size of employer	$937.50 per week ($48,750 per year)