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Employers Beware: Some States from Maine Through New York Impose a Higher Minimum Salary Threshold for the White Collar Overtime Exemption.

Employers Beware: Some States from Maine Through New York Impose a Higher Minimum Salary Threshold for the White Collar Overtime Exemption

December 15, 2016

As we recently reported to you, a United States District Court in Texas blocked implementation of the new federal overtime rule.  That decision is now on appeal on an expedited basis to the United States Court of Appeals for the Fifth Circuit.  While this appeal is pending, the federal minimum salary threshold for exempt employees who are covered by the FLSA remains at $455.00 per week ($23,660.00 annually).

Even though the new federal overtime rule raising the minimum weekly salary to $913.00 is on hold and may disappear entirely, employers must also track any minimum salary threshold for the white collar overtime exemption set by each state.  Each state has the right to establish separate wage and hour requirements.  Three states, Maine, Connecticut and New York, already have or will have in 2017, state minimum salary thresholds that are higher than the current federal weekly minimum of $455.00.

Maine

Effective January 7, 2017, Maine’s minimum salary threshold for the white collar overtime exemption will increase to $27,000.00 annually, which equals $519.24 per week.  Because Maine’s minimum salary threshold happens to be tied to the State’s minimum wage, the November 8 passage of the minimum wage increase had the effect of increasing Maine’s minimum salary threshold even though the threshold was not mentioned in the referendum.  The annual salary will increase by another $3,000.00 in 2018, and each subsequent year until it reaches $36,000.00 in 2020.  Any subsequent increase will depend on whether the minimum wage increases in accordance with the cost of living formula.

Connecticut  

Connecticut’s minimum salary threshold for the white collar overtime exemption is $475.00 a week, twenty dollars higher than the current federal minimum.

New York

New York’s minimum salary threshold for the white collar overtime exemption is currently $675.00 per week.  However, recently the New York State DOL issued proposed regulations providing for incremental increases to the minimum salary threshold.  Depending on the size and location of the employer within New York State, the proposed incremental increases to the salary threshold could reach as high as $1,125.00 per week over the next few years.

The minimum salary threshold set by Massachusetts and Rhode Island remain lower than the federal minimum threshold of $455.00.  New Hampshire and Vermont simply follow the federal minimum threshold and do not have a separate state minimum rate.

PLEASE NOTE:  With regard to the white collar overtime exemption, it is not enough for an employer to satisfy the higher of the federal or applicable state minimum salary threshold.  Even if an employee earns at least the appropriate minimum salary, the job responsibilities of the employee in question must also satisfy the job duties test set forth in the applicable federal and state law.

It is important for employers to have in place a robust compliance plan to comply with not only the federal requirements for the white collar overtime exemption but also with any requirements for the exemption set by state law.  For more information, please contact Peter Bennett pbennett@charlesc48.sg-host.com) or Rick Finberg (rfinberg@charlesc48.sg-host.com) of The Bennett Law Firm.

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