In what has become an annual tradition, New York state employers should once again take note of mandatory wage and salary increases that will take effect at year’s end. In addition, employers should be aware of the increased amount of leave and cash benefits available to employees in 2019 under the state’s Paid Family Leave law (“PFL”), and also the newly revised “call-in pay” regulations promulgated by the N.Y. Department of Labor, expected to take effect in 2019.

New York State Increases Minimum Wage

The state minimum wage will increase once again effective December 31, and is on track in the coming years to rise to a statewide $15.00 minimum wage. The wage increases are presently tied to an employer’s location in the state. The current minimum wage schedule is as follows:

General Minimum Wage Rate Schedule
12/31/18 12/31/19 12/31/20
NYC – Large Employers (of 11 or more) $15.00
NYC – Small Employers (10 or less) $13.50 $15.00
Long Island & Westchester $12.00 $13.00 $14.00
Rest of New York State $11.10 $11.80 $12.50

The above schedule applies to most employers in the state, with the notable exception of those employers engaged in the “hospitality industry,” such as restaurants, resorts, and hotels.

Salary Thresholds Increase to Meet Overtime Exemptions

In conjunction with the minimum wage increase, the minimum salary threshold for employees under the “Executive” and “Administrative” overtime exemptions will also increase effective December 31. Employees who meet New York’s definitions of “Executive” and “Administrative” employees are exempt from the state’s overtime pay requirements.

Like the minimum wage increases, the increased minimum salary thresholds are tied to an employer’s size and location in the state. In full, the scheduled increase is as follows:

General Minimum Threshold Schedule
12/31/18 12/31/19 12/31/20
NYC – Large Employers (of 11 or more) $1,125.00 per week
NYC – Small Employers (10 or less) $1,012.50 per week $1,125.00 per week
Long Island & Westchester $900.00 per week $975.00 per week $1,050.00 per week
Rest of New York State $832.00 per week $885.00 per week $937.50 per week

The increases listed above are specific to New York state’s law governing overtime exemptions. The analogous federal wage-and-hour law, the Fair Labor Standards Act (“FLSA”), and its accompanying regulations published by the U.S. Department of Labor, contain their own minimum salary thresholds for overtime exemptions. New York’s minimum salary threshold is higher than its federal counterparts—at least for the time being. A new federal “overtime rule” is expected to be published by the U.S. Department of Labor in 2019, which will likely increase the minimum salary thresholds under federal law. Most observers, however, expect New York’s minimum salary threshold will remain higher than the federal minimum thresholds.

Paid Family Leave Law Grants Increased Weeks of Leave and Benefits

The state’s Paid Family Leave Law (“PFL”) completed its first year in 2018. The law is one of the first of its kind in the country. PFL covers virtually all private-sector employers and grants employees job-protected, partially-paid leave to bond with a new child; care for a seriously ill family member; or deal with exigencies arising from a family member’s deployment to active military duty.

Like the wage increases detailed above, the amount of leave and cash benefits available under PFL are slated to increase annually over the coming years. In 2019, employees will be entitled to 10 weeks of PFL leave while receiving 55 percent of their average wage, up to a cap of 55 percent of the statewide average weekly wage. The statewide average weekly wage is currently $1,357.11, meaning employees on PFL leave in 2019 may receive a maximum weekly benefit of $746.41.

The expected PFL roll-out is as follows:

Year Percent of Average Weekly Wage Amount of Time Off
2018 50% 8 Weeks
2019 55% 10 Weeks
2020 60% 10 Weeks
2021 67% 12 Weeks

PFL is designed to be an employee-funded program. In most cases, employers’ PFL insurance coverage is paid for by deductions from employee paychecks at an amount set by law. In 2019, this deduction rate will be 0.153 percent of employees’ gross wages per pay period (an increase from the 0.126 percent deduction rate in 2018), up to a maximum annual deduction of $107.97 (an increase from the $85.56 maximum in 2018). Employers may begin deductions at the increased rate beginning January 1, 2019.

Modified Rules on Wellness Programs May Impact Insurance Premiums

Many employers encourage employee participation in “wellness programs,” which offer employees financial or other work-related incentives if they agree to participate in employer-sponsored medical exams or medical questionnaires. In 2016, the Equal Employment Opportunity Commission (“EEOC”) published a regulatory rule that let employers offer their employees up to a 30 percent reduction on the cost of individual-only health insurance premiums if the employees participated in the employer’s wellness program. Central to the rule was that employee participation in the program had to be “voluntary,” such that the program would not discriminate against disabled employees under the Americans with Disabilities Act (“ADA”).

Effective January 1, however, the EEOC rule enabling the 30 percent reduction on insurance premiums will be rescinded—potentially leaving many wellness programs in flux. The removal of the rule is the result of a lawsuit against the EEOC by the AARP, where a District Court judge found the EEOC had not justified its decision to interpret “voluntary” in the ADA to allow this incentive because it had not adequately explained how it was voluntary. The EEOC’s rescission notice is expected to be published on Friday, December 21.

Revised Call-in Pay Regulations May Impact Private Employers

Finally, the New York State Department of Labor recently unveiled revised “call-in pay” regulations. Employers may recall that the Department initially published proposed call-in pay regulations more than a year ago, in November 2017. On December 10, 2018, however, the Department announced a revised version of the proposed rules, which were published in the December 12 issue of the State Register.

The revised call-in pay regulations will require many private employers to review their employee scheduling practices. Under the proposed regulations, covered employers will have to pay employees additional hours of wages if an employee is called in to work on short notice, or if an employee’s shift is cancelled on such notice. Employers should expect these regulations to become finalized in the first quarter of 2019.  For an in-depth look into the revised call-in pay regulations, see our recent Legal Alert.

For more information, please contact Daniel J. Moore at (585) 419-8626 / or the Harris Beach attorney with whom you usually consult.

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Melville, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.