Department of Labor Issues Replacement Rule for FLSA Overtime Exemptions

The United States Department of Labor (DOL) recently issued proposed new regulations that would increase the minimum salary level requirements under the Fair Labor Standards Act (FLSA) for the executive, administrative and professional (“white collar”) overtime exemptions, as well as the highly compensated employee (“HCE”) overtime exemption. The proposed new regulations replace the Obama administration’s controversial 2016 salary level increases that were found invalid by a federal court.

While the proposed new regulations would require employers to pay higher salaries to meet the white collar and HCE overtime exemptions under federal law, their effect in New York State (“New York” or “State”) will be limited compared to many other parts of the country. The proposed higher salary level will have no impact on executive and administrative employees in New York because the State salary level for those employees already exceeds the newly proposed increased federal levels. The proposed salary increases will, however, affect professional employees in New York, as the State does not have a minimum salary level for professional employees. As a result, New York employers will have to comply with any increased federal salary level for professional employees to maintain their overtime exempt status. New York employers will also have to comply with the increased federal salary level for HCEs to maintain their federal overtime exemption. (New York employers should note that the State does not officially recognize the HCE exemption and the New York State Department of Labor has not indicated its position on the exemption.)

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