A new salary threshold for qualifying executive, administrative and professional exempt employees equaling: $700.97 per week as of January 1, 2021 An automatic increase in the salary threshold every year the minimum wage increases. Call 1-800-547-8367. Under the FLSA, to be a bona fide executive, administrative, or professional employee, employer must compensate the individual on a salary or fee basis (only for administrative and professional employees) at least $684 per week, excluding board, lodging, or other facilities. increases to go into effect as scheduled. Every state law is different and some exempt employees from the state minimum wage while other states only exempt the employee from overtime hours. Salary Test for Exempt Employees . remains permissible for all other categories of employers to pay A Review Of 2020 Labor & Employment Legislation In California. Employees must earn the salary threshold set by the FLSA to be exempt. You’ll only need to do it once, and readership information is just for authors and is never sold to third parties. However, in their CPI-adjustment announcements, Albuquerque and Las Cruces say the local minimum wage will increase to $10.50 per hour, i.e., the state minimum wage. White Collar Employees Covered by Minimum Wage. This development creates unique issues for employers subject to local minimum wage ordinances in Albuquerque, Bernalillo County, and Las Cruces. See Santa Fe, NM Code § 28-1.5(B). These employees are exempt from being paid overtime for hours worked over 40 each week. The “Nonurban” rate applies to employers located within a nonurban county. Specifically, the minimum will increase from $13.00 to $14.00 per hour for employees working in Long Island and Westchester, and from $11.80 per hour to $12.50 per hour for the rest of the state except New York City, where the minimum is already $15.00 per hour and will remain so. However, an employer’s ability to claim the tip credit is dependent on an employee’s weekly tip average equaling at least the hourly Tip Threshold (TT) (or TT(R) for resort hotel service employees) and an employee’s direct wage plus tips equaling or exceeding the minimum wage. Using the 2021 minimum wage, L&I has calculated the salary thresholds taking effect Jan. 1, 2021: Small businesses (1-50 employees): An exempt employee must earn a salary of at least 1.5 times the minimum wage, or $821.40 a week ($42,712.80/year). 1 Pay increases are not limited to hourly employees. 11 San Jose has a separate rate for youth training program participants, which the city sets in an approved application and remains valid for one year. In these jurisdictions, if the direct wage and tips an employer pays an employee equals the minimum wage, an employer satisfies its minimum wage obligation. To print this article, all you need is to be registered or login on Mondaq.com. They are as However, currently under state law, employers must pay covered tipped employees a … While these increases have been scheduled to gradually take effect over a number of years, the onset of 2020 brings further increases throughout the state. industries," and employers in the "building service Each January 1 afterwards, the city will annually adjust the rate based on changes to the CPI. Notably, the ballot measure creates a special minimum wage rate – 1.5 times the minimum wage – for work employees perform during a declared emergency; however, the increased minimum wage rate does not apply to telework. But, neither city’s minimum wage, when adjusted according to the formula the ordinances establish, produces a $10.50 per hour outcome. Like the minimum wage, the salary levels depend on employer size and location. The minimum wage rate is the lowest hourly pay that can be awarded to workers, also known as a pay floor. 36 An employee must earn a monthly salary equivalent to no less than 2 times the state minimum wage for full-time employment (employment in which an employee is employed for 40 hours per week). Under some state laws, these employees are exempt only from overtime requirements, meaning employers must pay them at least the state minimum wage for all hours worked, and many of these state minimum wage rates will increase in 2021. Hold Up! For employers with 25 or fewer employees, the minimum annual salary would be $54,080. Less than one month before voters went to the polls, the Florida Department of Economic Opportunity announced an annual CPI adjustment to take effect on January 1, 2021 ($8.65 per hour), as it was required to do under the state constitution before the amendments. California Updates Its Pay Data Reporting Requirements – Reports Are Due By March 31, 2021! Seyfarth Synopsis: Minnesota: An employee’s regular rate of pay must exceed one-and-a-half times the state minimum wage, which on January 1, 2021, will increase to $10.08 per hour for employers with $500,000 in annual gross sales, and to $8.21 per hour for employers with less than $500,000 in annual gross sales, and certain hotels. As such, Pennsylvania employers will not need to account for any state-specific changes until October 3, 2021 when the minimum salary increases to $780 per week and then again on October 3, 2022 when the minimum salary increases to $875 per week. Additionally, in 2021, there will be state law increases in the minimum hourly pay required to qualify for the state-law equivalent of the FLSA’s 7(i) retail or service establishment overtime exemption for employees paid commissions. Before we chart out the 2021 rates, however, we briefly highlight rate changes that occurred in fall 2020, November 2020 ballot measures, and a unique 2021 issue in New Mexico. Employers may translate the $684 a week amount into equivalent amounts for periods longer than one week: $1,368 (Bi-weekly); $1,482 (Semi-monthly); $2,964 (Monthly); $35,568 (Annual). 7 At the time of publication, Oakland had not announced its adjusted 2021 hotel-worker-specific minimum wage rates. Employers with operations subject to this rate should monitor the following city webpage: https://www.oaklandca.gov/topics/measure-ff-and-measure-z. The "subminimum wage" is a wage paid by First, we highlight state, counties, and cities where the minimum wage will increase in 2021. Finally, the tiered salary thresholds required for exempt status The new thresholds will go into effect Jan. 1, 2021. Nevada: An employee’s regular rate must exceed one-and-a-half times the state minimum wage, which on July 1, 2021, will increase to $9.75 per hour if an employer does not offer health benefits or $8.75 per hour if an employer offers health benefits. employer, Remainder of state, regardless of size of employer. Pennsylvania employees otherwise exempt under the duties test but making less than the specified minimum weekly salary must be paid overtime … In Albuquerque and Las Cruces, employers must pay tipped employees a minimum cash wage (MCW) that is no less than 60% or 40% of the applicable minimum wage, respectively. Preset increases to the minimum wage will occur on January 1 in 2023 ($14.00) and 2024 ($15.00). tipped workers, including hospitality industry employers Your regular paychecks should be at least $ (before taxes and deductions).. Because you are a non-exempt employee, your minimum salary depends on … Washington state and Seattle minimum wages for non-exempt employees are set to go up on January 1, 2020. Note, however, that the legislative history suggests the general minimum wage rate only applies to tipped employees of seasonal employers. The rest of the state outside New York City: $937.50 per week, which equals $48,750 per year. All employees are divided into two categories: exempt and non-exempt. Note that in Arizona, local minimum wage rates may apply (see above). 8 The minimum wage for employers with 26 or more employees remains $15.00 per hour. All three of the above exemptions require payment of a true salary: "Salary" is defined as agreed-upon periodic compensation, intended to cover a period of at least a week, equivalent to at least $684 per week,* that is not subject to reduction on the basis of quantity or quality of work performed. The 2021 Colorado minimum wage is $12.32/hr for standard pay, and $9.30/hr for tipped employees. Automatic three-year minimum salary adjustment. The minimum salary for exempt executive and administrative employees in New York will increase as follows: Nassau, Suffolk, and Westchester counties: $1,050 per week, which equals $54,600 per year. That said, the regulations do not prohibit prospective changes to exempt employees’ salaries (provided they still receive the minimum required salary). Salary Thresholds for Overtime Exempt Employees to Rise Jan. 1, 2021 Increase in state’s minimum wage rate to $13.69 an hour triggered recalculation As a result of the state’s minimum-wage rate rising to $13.69 an hour on Jan. 1, 2021, a new minimum salary threshold for overtime-exempt employees will also increase. The 2016 rule also increased the minimum salary for HCEs (to $134,004), allowed employers to use nondiscretionary bonuses and incentive pay to satisfy up to 10% of the salary threshold, and provided for automatic annual updates to keep the minimum salary level adjusted to the 40th percentile of full-time salaried workers in the lowest-wage Census region. The minimum wage in some of these states will increase in 2021,43 e.g., in Arizona the minimum wage will increase to $12.15 on January 1, and on July 1 the Nevada minimum wage will increase to $9.75 or $8.75 per hour, depending on whether an employer offers health benefits. wage rate for New York City employers remains $15 per hour for all Employers with fewer than 26 employees must pay a minimum salary of at least $1,040 in 2021. Along with the increase to the minimum wage, the amounts that Effective January 1, 2021, the minimum monthly salary for sheepherders increases to $2,488.97 per month for employers with 26 or more employees and $2,311.24 per month for employers with 25 or fewer employees. California: An employee’s earnings must exceed one-and-a-half times the state minimum wage, which on January 1, 2021, will increase to $14.00 per hour for employers with 26 or more employees and to $13.00 per hour for employees with 25 or fewer employees. All Rights Reserved. summaries to determine how much they can deduct for a uniform Also, various cities and local governments in California have enacted minimum wage ordinances exceeding the state minimum wage. However, this article only addresses the salary or fee amount and does not address whether or how employers may use other compensation sources to satisfy exempt employee pay requirements. Although this logic remains true concerning the federal minimum wage, which has remained $7.25 per hour since July 24, 2009, in recent years more states have taken steps to increase their rates. reduced by fifty percent. salary threshold will increase for New York employers effective Executive, Administrative, or Professional Exemption Minimum Pay Increases. First, it will increase the salary threshold at which employees are exempted from overtime compensation requirements under the Minimum Wage Act. In both jurisdictions, employers may pay employees $1 per hour less than the general minimum wage if they provide a certain level of health and/or childcare benefits. Directly below we highlight the minimum cash wage (MCW) that may be paid, and the maximum tip credit (TC) employers can claim, for covered tipped employees, as well as the amount of the increase. Finally, because New York has varying standards, we include the numbers in a standalone section after the below chart. 5 The minimum wage for employers with 26 or more employees remains $15.00 per hour. Bernalillo County announced the CPI adjustment would increase the local minimum wage from $9.20 to $9.35, more than $1 per hour less than the 2021 state minimum wage. To help manage this challenge, below we provide a rates-only update that details scheduled state- and local-level wage increases throughout 2021 so employers can determine the minimum amount they must pay non-exempt, tipped, and certain exempt employees. employers in "miscellaneous In various states, executive, administrative, or professional employees are exempt from state overtime requirements, but not exempt from state minimum wage requirements. We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. 16 In 2021, the separate rate for employers with 10,001 or more employees will remain $12.50 per hour. Similarly, for food service workers, the rates will remain $15.00 (minimum wage), $5.00 (maximum tip credit), and $10.00 (minimum cash wage). Like the minimum wage, the salary levels depend on employer size and location. The last several years have seen successful efforts by employees and employee advocates to raise the minimum wage and salary thresholds for exempt employees throughout New York State. Currently, the salary threshold for exempt employees rests at $455 a week or $23,660 annually. By S. Libby Henninger and Sebastian Chilco on, Diversity & Inclusion Training and Consulting, General Data Protection Regulation (GDPR), Littler Restructuring Assessment Solution, Florida Passes Amendment 2, Gradually Increasing Florida’s Minimum Wage to $15 an Hour, https://www.oaklandca.gov/topics/measure-ff-and-measure-z, New State Employment Laws Set to Take Effect on January 1, 2021, On September 1, 2020, the minimum wage in, On November 1, a new $14.00 per hour minimum wage for long-term care facility direct care staff took effect in. In 2021, an employee in your position is usually entitled to an annual salary of at least $. Chronologically, the increases will occur as follows: November 1, 2020: New Jersey (Long-Term Care Facility Direct Care Staff); December 31, 2020: New York (Nassau, Suffolk & Westchester Counties; Remainder of State; Fast Food Worker Outside New York City). Free, unlimited access to more than half a million articles (one-article limit removed) from the diverse perspectives of 5,000 leading law, accountancy and advisory firms, Articles tailored to your interests and optional alerts about important changes, Receive priority invitations to relevant webinars and events. ), Las Cruces), Ohio, South Dakota, Vermont, Washington (incl. 29 This includes any rate that would be in effect before the scheduled increase in 2021. Maybe You Can Invest Your Retirement Plan To Save The Planet! On Tuesday, the U.S. Department of Labor issued its final rule concerning overtime exemptions. Exempt employees must receive a salary of at least twice the state’s minimum wage for a 40-hour workweek. Salary threshold implementation schedule Salary thresholds for overtime exempt workers are a multiplier of state minimum wage for a 40-hour workweek 2021 Salary thresholds ƒSmall businesses: $821.40/week ($42,712.80/year) In California, exempt employees must receive a salary of at least twice the state minimum wage for a 40-hour workweek, in addition to meeting the general duties and other requirements. Salary Threshold for Exempt Employees (2021) Finally, the tiered salary thresholds required for exempt status are also rising effective December 31, 2020. Essentially, local minimum wage ordinances are a response to low or unchanging federal or state minimum wage rates. 34 The state rate that applies in New York City will remain unchanged at $58,500 (annually), $4,875 (monthly), and $1,125 (weekly). On January 1, 2021, the new state minimum salary thresholds for overtime exempt employees goes into effect. Stimulus Bill Adds New Disclosure Requirements For Consultants And Brokers To ERISA Health Plans, Employer Held Liable For Service Provider's Error, Final UBIT Regulations Likely To Affect Many Benefit Plan Investors, Benefit Plan Provisions In The Stimulus Bill, Congress Extends FFCRA Tax Credit: Employer Options, 2020 California Labor & Employment Year-End Update, Flexible Spending Account Changes: Increased Flexibility For Elections And Use Of Funds, BREAKING: President Biden Continues NLRB Shake-Up By Firing Acting NLRB GC. POPULAR ARTICLES ON: Employment and HR from United States. For a 40-hour workweek worked over 40 each week CPI changes this article, New. Maximum tip credit of seasonal employers Employment Legislation in California have enacted minimum wage Act cash! And discusses service charges, credit card tips, and cities where the minimum will! ( general ), employers must pay covered tipped employees, the state ’ s hourly wage! 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