New York’s Overtime Laws Stand Strong While Federal Rules Face Legal Challenges in 2024

The landscape of overtime regulations underwent dramatic changes in 2024, creating a complex web of federal and state requirements that every New York employer and employee must understand. While federal overtime rules faced significant legal challenges culminating in a landmark court decision, New York maintained its own robust overtime protections that continue to evolve independently.

The Federal Overtime Rule Disruption

On November 15, 2024, the U.S. District Court for the Eastern District of Texas invalidated a U.S. Department of Labor (DOL) regulation that raised the salary threshold for the “white-collar” overtime exemption under the Fair Labor Standards Act (FLSA), with the court granting summary judgment to the plaintiffs, vacating the 2024 rule nationwide. This decision had far-reaching implications for employers nationwide who had been preparing to implement significant salary increases for exempt employees.

As a result of the court’s ruling, the salary threshold has reverted to the lower level of $684 per week previously in effect under the DOL’s 2019 overtime rule, meaning the minimum salary threshold will revert to $35,568, or $684 per week. This means the minimum salary level for an EAP Exemption returns to $684 per week, and employers who were scrambling either to reclassify or give raises to employees before year end can cancel those plans and simply leave exempt employees’ salaries at current levels.

New York’s Independent Overtime Framework

Despite the federal court’s decision, New York has maintained its own overtime regulations that are more protective of workers than federal standards. The New York salary threshold is still higher than the exempt salary thresholds for FLSA, making the New York salary threshold for exempt status eligibility higher than the federal threshold.

As of January 1, 2025, the new weekly minimum salary threshold for exempt status increased from $1,200.00 to $1,237.50 per week in New York City, Long Island, and Westchester and increased in the remainder of the state from $1,124.20 to $1,161.65 per week, with the minimum weekly salary requirement for exempt status being $1,237.50 per week in New York City, Long Island, and Westchester County (annually, $64,350), and in the rest of the state the current minimum is $1,161.65 per week (annually, $60,405.80).

Additional increases planned to take effect on January 1, 2026, will bring the weekly threshold to $1,275.00 ($66,300 per year) in New York City, Long Island, and Westchester County, and to $1,199.10 weekly ($62,353.20 per year) for the rest of New York, with the weekly minimum salary threshold for exempt “executive” and “administrative” employees increasing to $1,275.00 per week in New York City, Long Island, and Westchester and in the remainder of the state to $1,199.10 per week.

Understanding Exempt Employee Classifications

Generally, to be exempt as an administrative or executive employee, New York law requires that (1) the employee is paid a base salary, (2) the base salary is above a specified threshold, and (3) the employee performs certain exempt functions, with these exemption thresholds applying only to administrative and executive employees; New York does not have a commensurate threshold for employees who are eligible for the professional exemption, and thus the federal salary thresholds for exemption will apply for these workers.

This creates a unique situation where professional employees in New York are subject to the lower federal threshold, while administrative and executive employees must meet the higher state requirements. The distinction is crucial for employers determining proper classification and compensation levels.

Implications for Workers and Employers

The divergence between federal and New York overtime laws creates both opportunities and challenges for workers and employers. Employees who were previously classified as exempt under federal law but fall below New York’s higher thresholds may be entitled to overtime compensation they weren’t receiving before.

For workers who believe they have been improperly classified or denied overtime pay, consulting with an experienced unpaid overtime lawyer can help clarify their rights and potential remedies. The complexity of navigating both federal and state requirements makes professional legal guidance particularly valuable.

The Role of Experienced Employment Law Counsel

Manhattan-based employment law specialists like The Howley Law Firm understand the intricacies of New York’s evolving overtime landscape. The firm specializes in employment and whistleblower law, and their lawyers have helped clients recover millions of dollars for sexual harassment, discrimination, and unpaid wages. For a small law firm in New York City, The Howley Law Firm has an unprecedented level of experience to offer clients, with founder John Howley, Esq., having almost 30 years of experience in some of the largest and most important employment cases in modern history.

The firm’s approach reflects their background representing companies such as Pfizer, Texaco, Citibank, and Sony as partners in large corporate law firms, and they are dedicated to giving clients the same high-quality, aggressive representation that corporations get at large law firms. This experience provides unique insight into how employers approach overtime classifications and compensation decisions.

Looking Ahead: Compliance and Protection

As New York’s overtime thresholds continue to increase annually, both employers and employees must stay vigilant about proper classification and compensation. Employers are encouraged to review their employee exemption classifications for employees to ensure that they are compliant with New York law and, if not, to promptly remedy any deficiencies.

The federal court decision blocking the DOL rule changes doesn’t affect New York’s independent overtime protections, which remain some of the strongest in the nation. Workers who suspect they have been misclassified or denied proper overtime compensation should act promptly, as wage and hour violations can result in significant back pay awards, penalties, and attorney’s fees.

Understanding these complex regulations requires careful analysis of both job duties and salary levels under the applicable federal and state standards. As the legal landscape continues to evolve, having knowledgeable employment law counsel can make the difference between receiving proper compensation and leaving money on the table.