Salary Thresholds Under New York State Law For White Collar Overtime Exemptions
In Part One of this article, we discussed tests for allowing exemption from overtime pay for “white collar” professional, executive and administrative employees under federal and New York State law.
Effective December 31, 2018, New York State’s salary basis threshold for exempt executive and administrative (but not professional) employees increased. Employers should periodically review the job duties, functions and salaries of those currently classified as exempt and, if they wish to maintain the exemption for those below the new thresholds, must increase their salaries accordingly. Here are the new minimum salary requirements to maintain exemptions from overtime for employers in New York State:
Employers in New York City
- Large employers (11 or more employees)
- $1,125.00 per week ($58,500 annually) on and after 12/31/18
- Small employers (10 or fewer employees)
- $1,012.50 per week ($52,650 annually) on and after 12/31/18
- $1,125.00 per week ($58,500 annually) on and after 12/31/19
Employers in Nassau, Suffolk, and Westchester Counties
- $900.00 per week ($46,800 annually) on and after 12/31/18
- $975.00 per week ($50,700 annually) on and after 12/31/19
- $1,050.00 per week ($54,600 annually) on and after 12/31/20
- $1,125.00 per week ($58,500 annually) on and after 12/31/21
Employers Outside of New York City and Nassau, Suffolk, and Westchester Counties
- $832.00 per week ($43,264 annually) on and after 12/31/18
- $885.00 per week ($46,020 annually) on and after 12/31/19
- $937.50 per week ($48,750 annually) on and after 12/31/20
New York State has no minimum salary for exempt “professional” employees, although most of those employees would still be subject to the federal salary minimum for exemption ($455 per week, or $23,660 annually). The U.S. Department of Labor (“DOL”) has not raised the federal minimum salary for exemption since 2004, but on March 7, 2019, the DOL published a proposed rule that would increase the salary threshold for managerial, administrative and professional white collar exemptions to $679 per week ($35,308 per year), to take effect on January 1, 2020.
New York Fashion Industry employers should review the job duties, functions and salaries of their employees whom they currently classify as exempt from overtime pay to insure compliance with both the job duties and salary requirements. For an employee whose salary falls below pay requirements, the employer will have to decide whether to increase the salary in order to be able to continue the overtime exemption or to reclassify the currently exempt employee as non-exempt and pay them overtime for hours worked over forty in a week.
For those currently exempt employees whom the employer decides to reclassify as non-exempt, the employer should insure that all their work time is accurately recorded as of the date of change and going forward. Finally, employers should make it a point to conduct regular reviews of the primary duties of those employees it wishes to continue as exempt, since merely paying the higher salaries will not be sufficient. To qualify for the overtime exemption, employers will be required to meet both the salary test and the job duties test.
Federal and state overtime law are quite fact specific. Failure to comply can lead to expensive administrative and court proceedings. The statutes of limitations – that is, the look back periods the agencies and the courts may consider in calculating overtime pay deficiencies – are two years under federal law (three years if a willful violation is found), but are six years under New York State law. And both federal and state laws provide for liquidated (double) damages and for an employer to pay the legal fees of a successful plaintiff’s lawyer. Moreover, class and collective actions abound. In short, stay current on what you need to know and consult with employment counsel as needed and whenever in doubt; or be prepared to endure exceedingly painful, protracted and costly legal consequences.
Credit: Evan J. Spelfogel
One of the most costly mistakes a fashion business can make is to misclassify an employee as overtime exempt regardless of the employee’s duties and functions. That creates the risk of substantial liability under both federal and state law.
The Federal Fair Labor Standards Act provides for several basic overtime exemptions. These include the executive, professional and administrative exemptions and are commonly referred to as “white collar” exemptions.
To be exempt from overtime pay, an employee must be paid a fixed salary regardless of hours worked of at least $455 per week ($23,660 per year) under federal law, and more than twice that amount under New York State Labor Law, and must have duties and functions that fall within the applicable duties test.
Executive Exemption Duties Requirements
To qualify as an exempt executive (high-level manager), an employee’s primary duties must relate to managing a business or a department within a business. The employee must regularly supervise at least two full-time employees or the equivalent in part-time employees, and must have the authority to hire, fire and discipline employees, or effectively to recommend such action. Secondary tests include interviewing and training employees, and assigning and directing their work. Typically, this exemption would attach to store and departmental managers.
Administrative Exemption Duties Requirements
To qualify as an exempt administrative employee, the employee’s primary duties must consist of the performance of office or non-manual work directly related to management policies or general business operations, including customarily and regularly exercising discretion and independent judgment involving the comparison and evaluation of alternative courses of conduct and making decisions, after consideration of the various possibilities, free from immediate direction or supervision.
Duties may relate to taxes, finance, accounting, budgeting, auditing, insurance, quality control, purchasing, procurement, advertising, marketing, research, safety and health, personnel management, human resources, employee benefits, labor relations, public relations, government relations, computer network, internet and database administration, and legal and regulatory compliance.
Factors may include whether the employee formulates, affects, interprets, or implements policies or practices, whether the employee may commit the employer in matters having significant financial impact, and whether the employee has authority to waive or deviate from established company policies and procedures without prior approval.
Professional Exemption Duties Requirements
An exempt professional employee is one who falls under the definition of either a “learned professional” or a “creative professional.” Learned professionals work in professions typically requiring an advanced degree (college or higher) and a prolonged course of specialized intellectual instruction such as law, medicine, accounting, engineering, teaching, or architecture. Primary duties must be intellectual and involve the regular use of discretion and independent judgment.
Creative professionals in the fashion industry include, among others, fashion designers, fashion stylists, textile designers, fashion public relations, fashion writers, fashion illustrators, garment technologists, graphic designers and artists, creative employees who are given only a subject matter or underlying concept of what they will create, and individuals who plan and direct the creative elements of new fashion and their advertising agencies. These individuals’ primary duty is performing work that requires invention, imagination, originality or talent, as distinguishable from work dependent merely on intelligence, diligence, and accuracy. Examples of non-exempt work in fashion include fabric cutters, sizers, copyists, re-touchers of photographs, and rewriters of press releases or advertising copy, and general fashion industry employees whose work is subject to substantial control.
In Part Two, we will review in detail the New York State salary thresholds for overtime exemption.
Evan is a senior counsel in the Employment & Labor Law Practice.
An interview with Simon Crompton, creator of the blog Permanent Style
In my last post, I reported on my conversation in London with Simon Crompton, who runs the website Permanent Style (www.permanentstyle.com), which is devoted to the world of bespoke (custom-made) menswear. We discussed elements of style for men, but when the conversation moved to the topic of how a website proprietor protects his own intellectual property, Mr. Crompton had some decidedly pragmatic ideas.
Permanent Style is authored almost entirely by Mr. Crompton, who, last year, was finally able to devote his full professional time to it. The site features the latest developments in bespoke, from tailoring to shirtmaking to shoemaking, around the world. It is supported by advertising, and it also promotes its own limited line of products, from surprisingly stylish watch caps (ski caps) to Oxford shirting for readers to provide their bespoke shirtmakers. Prominent on the site are reviews of makers of bespoke clothing and shoes, with Mr. Crompton serving as live mannequin and photographer’s model throughout, reporting on each step of the process.
I asked Mr. Crompton what kind of legal protections he employs for his work. Because his writing originates in Britain and not the USA, he is spared the unique (and to those of us who have done it for clients or ourselves, often frustrating) requirement of registering his copyrights. His pragmatic view: “It isn’t as if it is a novel or song lyrics. Anything on the site obviously comes from me, and no one is going to run out and say I’m Simon, I wrote this.”
As for protecting his brand, he holds to an equally pragmatic approach: be first out, keep a solid reputation, and you win. “The site has been up just over ten years, and it is well-known. That’s a very good position in the world relative to others who might be trying to establish themselves.”
Mr. Crompton also noted a key advantage to prose authored in Internet time: “What I write is so fast-changing, and there is such a high volume of it that it’s not that easy to protect, but at the same time, there is not much virtue in somebody copying. I already have the biggest traffic. If someone were to start copying my articles, that would never generate much traffic for him. He would still have to attract readers and then subscribers by offering something different, and unless that should happen, I would always do better on search engine optimization.”
That goes to the heart of a key debate in copyright circles—what utility is legal protection in a world in which almost everyone can read just about anything, and anyone can publish just about whatever he or she chooses to write, on platforms from Twitter on up? Registering the copyright, to say nothing of suing to stop infringement, can look old-fashioned in the context of a business (and social-media) model that values “reach,” often by free access, and loyalty for the generation of revenue more than it does traditional legal protections.
In short, Mr. Compton is conducting a very contemporary business to promote many very traditional crafts. If by so doing he helps craftsmanship flourish, we can only commend him-even if the model depends more on lawyers reading about dressing well (and, we hope, attempting to do so) than on offering legal advice. When it comes to what we do, however, lawyers can only continue to recommend to their clients that they reach out and consult with their counsel whenever making important decisions about their intellectual property. If you do not make these decisions yourself, the marketplace will very likely make them for you.
Credit: Alan Behr
On January 8, 2019, the U.S. Supreme Court heard oral arguments in, Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC. The court is expected to resolve a decades-old split of opinion among the federal Circuit Courts on whether the Copyright Act permits a lawsuit to be filed upon submission of a copyright application or not until the copyright registration certificate has been issued or refused.
The language in the statute is simple. 17 U.S.C. § 411 reads: “no civil action shall be instituted until … registration of the copyright claim has been made in accordance with this title.” The statute also provides that, “[i]n any case … where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.”
In this case, Fourth Estate sued Wall-Street.com when the website continued to publish Fourth Estate’s work after the expiration of the limited license that had been granted to the website. Fourth Estate filed copyright applications for the misappropriated online publications and then asserted a claim for copyright infringement; however, its claim was dismissed by the Eleventh Circuit because the Copyright Office had not yet issued registration certificates. As have the Courts of Appeal for the Third and Seventh Circuits, the Eleventh Circuit follows the Tenth Circuit’s “registration approach,” which requires the Copyright Office to have acted on an application for registration by approving or denying it prior to initiating a lawsuit. The Fifth and the Ninth Circuits, however, follow the “application approach,” which allows for the commencement of an action upon filing a copyright application.
The split among those courts has large implications for photographers, writers, musicians, and fashion designers. For instance, the Copyright Office application processing time is notoriously slow: it can range from six months to more than a year to issue a registration. Creators are forced to endure an unpredictable wait time – or avoid that delay by paying an additional $800 special handling fee for expedited processing. In a seasonal industry such as fashion, where trends evolve so quickly and styles head to market within just a few months from creation, a small company cannot afford to sit back and wait for its copyright applications to be processed if infringement appears to be a credible threat, but it may also find that filing multiple applications with very significant expedited processing fees imposes an unacceptably great financial burden.
The fashion industry is a multi-billion dollar international industry. It has been argued that requiring the issuance of a registration certificate (or a refusal to register from the Copyright Office) for American authors and domestic works before litigation can commence conflicts with the de-emphasis on copyright formalities established by the Berne Convention, which governs copyrights across the globe. For now, this is all in the hands of the Supreme Court. We will provide a follow-up post when its decision is rendered.
Credit: Candace R. Arrington
An interview with Simon Crompton, creator of the blog Permanent Style
Readers of our blog have probably noticed my interest in custom-made clothing. There is a professional reason: because we represent so many different brands of ready-made clothing, wearing something more esoteric allows me not to show favorites.
For over ten years, Simon Crompton has been reporting online, in his website Permanent Style (www.permanentstyle.com), about the refined world of custom-made menswear—which, in British English, is known as bespoke (as in, asked for in advance). Mr. Crompton may be familiar to intellectual-property lawyers from his years of service as the lead writer for the International Trademark Association’s annual meeting newsletter—among other publications. I recently sat down with him at a café in London, and we talked about lawyers, protection of his own intellectual property and the finer things in menswear.
“I like the fact that lawyers seem to man the last bastion of dressing a little bit formally—because that’s generally what you want from your lawyer,” said Mr. Crompton, echoing the advice of the American tailor and author Alan Flusser. And he agreed on the reason: it is all about building a sense of trust. He hastened to add, however, that it is not about conformity: “All over the UK, and I’m sure it happens in the US as well, you see young lawyers outside of a pub on a Friday night, and eighty percent of them will be wearing a navy suit, white shirt and black lace-up shoes. It looks completely predictable. There is no expression of individuality.”
Bespoke, he explained, is about looking smart but in your own way: all fine tailors have a “house style,” but within what is typically quite a broad range, the customer in effect participates in designing what he will wear. Indeed, I had just come to Mr. Crompton from visiting my own London tailor, Henry Poole & Co., where I was able to plan a future suit as purposefully as a chef planning a meal: a gray pin-dot cloth in wool and cashmere. A peak or a notch collar? This time, the notch. Lining: abjure the bold prints for something more reserved, a contrasting gray pattern, but still quite unique. And a collared vest (called here a waistcoat)—because, as a transplanted New Orleanian, I still am not quite used to New York winters and because, to be frank, it adds a touch of style. That is what bespoke is all about.
Our next topic was dear to my editorial heart: I have delved several times on these pages into the mysteries of the necktie—that one item of a man’s workday dress that has absolutely no discernible function except to make him look better. It also relates to a very important fact about the male physique: a well-cut suit jacket forces the eye upward, to the neck and then the face. Having it pass along a v-shaped crop of chest hair does not support an impression of a man of consequence. “A suit without a tie can work sometimes,” Mr. Crompton offered, “if it is a very casual suit, but most times, it just looks as if something is missing.”
Indeed, although Mr. Crompton was wearing a dark green Neapolitan suit (by the tailor Ettore de Cesare) made of corduroy—that ribbed cotton cloth that is the winter-weight mirror to the informality of linen for summer—he was quite correct that it would have worked far less successfully without his blue woolen knit tie by Trunk Clothiers of London.
But what about those—relatively speaking—more casual days even lawyers are sometimes afforded? “I think it is important for a lawyer to try to master the art of wearing sports jacket and trousers,” said Mr. Crompton. His use of the word master was not an accident. Most professional men wear that outfit often; doing it in a stylish way, however, is a challenge to many. “Start off with Navy jacket and gray trousers and start experimenting slightly—with brown trousers and a different kind of jacket with subtle patterns.” In other words, make it stylish, but make it your own—even if every bit of it was purchased off-the-rack. Remember that bespoke customers also buy most of what they wear, from jeans to raincoats, ready-made.
And that is what bespoke is really about: doing it smart, doing it stylishly and most important, doing in a way not necessarily done by others.
In my next post, I will explore how Mr. Crompton looks to protect his own intellectual property.
Credit: Alan Behr
See post…“Perfect Fit – Part I“