Compliance updates, analysis, plus HR and payroll best practices from HR One
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Employers in New York are subject to different minimum wages, allowable tip credits, and minimum exempt employee salaries based on where employees work and what kind of work they do.
Employees must meet both the duties test and the salary threshold test to be considered exempt. If an employer currently has employees who meet the duties test, and qualify as exempt from overtime under the administrative, executive, or professional exemptions but do not meet the new salary threshold levels, they would be considered non-exempt going forward and would become eligible for overtime. Because the salary level test under New York State regulations for the administrative and executive exemptions is higher than the federal salary test, New York State employers must meet this higher level to claim the exemption.
The wage increases listed below take effect on December 31, 2021.
Minimum Wage -- Non-Exempt Employees
The minimum wage applies to most hourly workers.
| Region | Current | As of 12/31/2021 |
| NYC – Large Employers (of 11 or more) | $15.00 | $15.00 |
| NYC – Small Employers (10 or less) | $15.00 | $15.00 |
| Long Island & Westchester | $14.00 | $15.00 |
| Remainder of New York State | $12.50 | $13.20 |
Minimum Wage for Tipped Employees in the Hospitality Industry
In the restaurant and hospitality industry, employers are permitted to pay certain employees a reduced minimum wage rate in conjunction with the tips received by the employee, called a “tip credit.”
Food service workers
| Region | Current | As of 12/31/2021 |
| NYC – Large Employers (of 11 or more) |
$10.00 Cash
$5.00 Tip |
$10.00 Cash
$5.00 Tip |
| NYC – Small Employers (10 or less) |
$10.00 Cash
$5.00 Tip |
$10.00 Cash
$5.00 Tip |
| Long Island & Westchester | $9.35 Cash
$4.65 Tip |
$10.00 Cash
$5.00 Tip |
| Remainder of New York State | $8.35 Cash
$4.15 Tip |
$8.35 Cash
$4.15 Tip |
Service employees
| Region | Current |
As of 12/31/2021 |
| NYC – Large Employers (of 11 or more) |
$12.50 Cash
$2.50 Tip |
$12.50 Cash $2.50 Tip |
| NYC – Small Employers (10 or less) |
$12.50 Cash
$2.50 Tip |
$12.50 Cash
$2.50 Tip |
| Long Island & Westchester | $11.65 Cash
$2.35 Tip |
$12.50 Cash
$2.50 Tip |
| Remainder of New York State | $10.40 Cash
$2.10 Tip |
$10.40 Cash
$2.10 Tip |
Fast Food Minimum Wage
As of July 1, 2021, all fast food workers in New York State must make at least $15.00 per hour.
A fast food establishment is any business that meets the following criteria:
Exempt Administrative and Executive Minimum Salary Threshold
The weekly minimum salary threshold for exempt executive and administrative employees in New York will increase as follows:
| Region | Current | As of 12/31/2021 |
| NYC – Large Employers (of 11 or more) | $1,125.00 | $1,125.00 |
| NYC – Small Employers (10 or less) | $1,125.00 | $1,125.00 |
| Long Island & Westchester | $1,050.00 | $1,125.00 |
| Remainder of New York State | $937.50 | $990.00 |
What should employers be doing now?
Review your current payroll records to see if any employees will not meet either the minimum wage or salary threshold requirements. For any current employees earning minimum wage their rate needs to go up effective December 31, 2021. For any employees currently earning a salary under the administrative or executive exemption thresholds, they will either need to receive an increase to at least the minimum OR they need to be reclassified as non-exempt from overtime and paid an hourly rate.
If you have questions about how these changes affect your payroll practices please contact your designated HR One representative.