Exempt vs. Non-Exempt; Minimum Wage Increases and NY State Salary Threshold Increase 2022
March 25, 2022

Updated 3/25/2022


This article explains how to pay employees, as well as the new minimum wage that went into effect back on 12/31/2021. Non-compliance with the information could lead to repercussions during a DOL audit.

 

The New York State Department of Labor late last year published final rule regarding the increased salary thresholds to be considered exempt from overtime as well as changes to the minimum wage schedule.
 
Under both federal and New York law, employers must pay non-exempt employees at least the minimum wage for each hour worked and 1.5 times their regular rate of pay whenever they work more than 40 hours in a workweek. While most employees must be classified as non-exempt, federal, and state law include exemptions from the minimum wage and overtime requirements for certain employees, including bona fide professional, administrative, and executive employees.
 
Remember, it is not enough to simply pay an employee what an “Exempt” employee is supposed to receive and expect that employee to be classified as EXEMPT. They have to meet the criteria:
 
•  Must be paid equal to the requirements set forth for the Exempt Qualifications (i.e. Administrative, Professional, Executive)
•  Paid on a Salary Basis (Paid a Salary each pay period regardless of the hours they work. * with limited exceptions)
•  Must meet the Job Duties Test for their position
 
If they do not meet ALL THREE of these criteria, then they can not be classified as exempt, and if an employer chooses to do so, an employer’s level of exposure to a Department of Labor Audit is greatly increased. The duties tests are further explained below.
 
Employees who meet the duties test under the Fair Labor Standards Act (FLSA) for executive and administrative exemptions must also meet the salary level requirements in New York in order to be exempt. New York’s exempt employee salary threshold will adjust annually in proportion to increases in the minimum wage. All rate changes will take effect on December 31st of each year.


Below is an overview of exemption tests under New York law.


Salary-Level Test (New York):


Administrative and Executive Exemptions:

For the administrative and executive exemptions, the minimum salary is 75 times the state minimum wage. The minimum salary differs based on where in the state the employee works.

 
Here are the minimum salary requirements currently in effect in New York:


NYC  $1125.00

Other NY counties (Outside of NYC)  $990.00
Remainder of Downstate (Nassau, Suffolk & Westchester counties)  $1125.00
As of 12/31/2021 – Other NY counties (Outside of NYC)  $990.00
As of 12/31/2021 – Remainder of Downstate (Nassau, Suffolk & Westchester counties)  $1,125.00


Professional Exemption:

For the professional exemption, there is no minimum salary requirement under NY State law, but the federal Fair Labor Standards Act (FLSA) has a minimum. In this case, most New York employers would be required to meet the FLSA's minimum salary requirement for the professional exemption (in addition to meeting the federal and state duties tests).
Currently, to qualify for the professional exemption under the FLSA, an employee must be paid a salary of at least $684.00 per week ($35,568 annually).
 

Salary-Basis Test:

New York generally follows federal rules for the salary-basis test. To qualify for the state and federal exemption, an employee must receive their full salary for any week in which they perform any work. Salary reductions are not permitted due to variations in the quality or quantity of the employee's work.


For exempt employees, salary deductions are limited to the following circumstances:

 

 • One or more full day absences for personal reasons other than sickness or disability.

 •  Absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy, or practice of providing compensation for salary lost due to illness.
•  To offset jury or witness fees, or for military pay.
•  For penalties imposed in good faith for infractions of safety rules of major significance.
•  For unpaid disciplinary suspensions of one or more full days imposed in good faith for serious misconduct, such as sexual harassment, workplace violence, drug, or alcohol use, or for violations of state or federal laws. The suspension must be imposed pursuant to a written policy applicable to all employees.
•  In the employee's first or last week of employment if the employee does not work the full week; or
•  For unpaid leave taken by the employee under the Family and Medical Leave Act.
Under federal and state rules, deductions from exempt employees' salaries for any other reason are prohibited.
 

Duties Test (New York):

New York's duties tests vary for each exemption and are slightly different than the federal duties tests.
 

Administrative Exemption:

To qualify for the administrative exemption under New York law:

 

•  The employee's primary duty must involve performing office or non-manual work directly related to management policies or the employer's general operations.
•  The employee must regularly exercise discretion and independent judgment; and
•  The employee must:


o  Regularly and directly assist the employer or an employee employed in a bona fide executive or administrative capacity; or
o  Perform, under only general supervision, specialized or technical work requiring special training, experience, or knowledge.


NOTE: To see who typically falls under the Administrative Exemption, see the attached Administrative Exemption PDF

 

Professional Exemption:

To qualify for the professional exemption under New York law, the employee's primary duty must consist of performing work that requires advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study.


The employee's work must:


•  Require the consistent exercise of discretion and judgment.
•  Be predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical, or physical work); and
•  Be of such a character that the output produced cannot be standardized in relation to a given period.
•  NOTE: To see who typically falls under the Professional Exemption, see the attached Professional Exemption PDF


Executive Exemption:

To qualify for the executive exemption under New York law the:


•  Employee's primary duty must consist of the managing a customarily recognized department or subdivision of the enterprise.
•  Employee must customarily and regularly direct the work of two or more other employees.
•  Employee must have the authority to hire or fire other employees, or their suggestions and recommendations will be given weight; and
•  Employee must customarily and regularly exercise discretionary powers.
•  NOTE: To see who typically falls under the Executive Exemption, see the attached Executive Exemption PDF


An employee's "primary duty" is generally defined as the principal, main, major, or most important duty that the employee performs. The determination of an employee's primary duty must be based on all the facts in a case, with the major emphasis on the character of the employee's job.


Conclusion:

Before classifying employees as exempt from overtime, make sure that the employee satisfies the salary-level, salary-basis, and duties tests under both federal and state law. If an employee is covered by both the federal and state law but does not meet both sets of tests, consult with counsel and/or a CPA to determine how you should classify the employee in that situation.

Also note as of 12/31/2021:

The NY State minimum wage for Long Island and Westchester counties will increase from $14.00 per hour to $15.00 per hour


*Annual increases for the rest of the state will continue until the rate reaches $15 minimum wage (and $10 tipped wage). Starting 2022, the annual increases will be published by the Commissioner of Labor on or before October 1. They will be based on percentage increases determined by the Director of the Division of Budget, based on economic indices, including the Consumer Price Index.


The NY State minimum wage for counties outside of NYC will increase from $12.50 per hour to $13.20 per hour.

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New York Secure Choice: A Guide for Employers After the Deadline

July 15, 2026
Over the past several months, New York employers have been preparing for the phased rollout of the New York Secure Choice Savings Program . With the final registration deadline for eligible employers with 10 to 14 employees now passing behind us, many business owners are asking the same question: What's next? Whether your business has already registered, certified an exemption, adopted a qualified retirement plan, or you're realizing you still have action to take, now is a good time to understand your options and make sure you're moving in the right direction. If You Haven't Taken Action Yet If your business was required to comply with the New York Secure Choice mandate and missed the deadline , don't assume it's too late to move forward. The first step is determining which path applies to your organization. Generally, employers have three options: Register for the New York Secure Choice Savings Program if you do not sponsor a qualified retirement plan. Certify an exemption if your business already offers a qualified retirement plan that satisfies the state's requirements. Establish a qualified private retirement plan if you decide that approach is a better fit for your business before completing the state's registration process. The important thing is to take action rather than continue waiting . Delays can create unnecessary compliance concerns, while addressing the requirement now can help you move forward with confidence. If you're unsure which option applies to your business, it's worth taking the time to understand your obligations before making a decision. Compliance Was the Starting Point, Not the Finish Line The Secure Choice program was created to expand access to retirement savings for employees whose employers do not offer a qualified retirement plan. For many businesses, however, the decision isn't simply whether to comply with the law. It's whether the retirement solution they choose aligns with their broader business goals. Questions worth asking include: Does our current retirement offering help us attract and retain employees? Is the administrative process efficient for our payroll and HR teams? Are employees receiving enough education to understand and use the benefit? Will this solution continue to work as our business grows? Compliance satisfies a requirement. A thoughtful retirement strategy can support your workforce for years to come. If You Chose Secure Choice, Continue Evaluating Your Needs For some employers, Secure Choice may be an appropriate fit. For others, it may serve as a starting point while they evaluate whether a private retirement plan would better support their organization over the long term. Private retirement plans often provide additional flexibility, expanded plan design options, employer contribution opportunities, and greater support for employee education . Depending on the provider, they may also integrate more seamlessly with payroll and HR systems , reducing manual administration. The right solution depends on your workforce, business goals, and administrative preferences. If You Certified an Exemption, Review It Periodically Some employers met the state's requirements because they already sponsor a qualified retirement plan. That doesn't necessarily mean there's nothing left to review. Take time to evaluate whether: Your current plan still meets the needs of your workforce. Employees understand and are participating in the benefit. Payroll and retirement processes remain efficient. Your provider and service model continue to support your organization. A retirement plan should evolve as your business does. Retirement Benefits Can Support More Than Compliance Retirement benefits are increasingly becoming part of how employees evaluate an employer. While compensation remains important, employees are also looking for organizations that invest in their long-term financial well-being. Offering a retirement benefit can help support recruitment, retention, and employee satisfaction while demonstrating a long-term commitment to your workforce . The conversations around retirement planning are no longer limited to large organizations. Businesses of all sizes are recognizing the role these benefits can play in building a stronger workplace. Take This Opportunity to Review Your Overall Strategy With the Secure Choice deadlines now complete, this is a natural time to step back and look at the bigger picture . Consider reviewing: Your retirement plan Payroll processes Employee communications Benefits strategy HR administration These areas often work best when they support one another rather than operating independently. Looking Ahead The deadlines may be behind us, but retirement planning is an ongoing process . Whether your organization enrolled in Secure Choice, sponsors a private retirement plan, or is still determining the best path forward after the deadline, taking action now can help you satisfy the state's requirements while putting a long-term retirement strategy in place. At Simco, we help employers understand the New York Secure Choice mandate, evaluate private retirement plan options, and align retirement benefits with payroll, HR, and broader workforce goals. If you're unsure what your next step should be, our team is here to help you navigate your options and move forward with confidence.

Employee Handbook Best Practices: What Makes One Truly Effective?

July 6, 2026
Ask a group of employers if they have an employee handbook, and most will probably say yes. Ask whether it's been reviewed recently, reflects how the business actually operates, or answers the questions employees ask every week, and the answers often become less certain. A handbook shouldn't exist simply because it's expected. When done well, it's one of the most practical tools an organization can have. It sets expectations, creates consistency, gives managers confidence, and helps employees understand how your workplace operates. It can also help reduce misunderstandings before they become larger issues. The difference isn't whether you have an employee handbook. It's whether your handbook is actually working for your organization. It Reflects the Way Your Business Operates Today Businesses evolve. Teams grow, technology changes, new laws are introduced, and workplace expectations continue to shift. Unfortunately, many handbooks don't keep up. Policies that were accurate three years ago may no longer reflect your current practices. Perhaps you've added remote or hybrid work, updated your PTO program, changed holiday schedules, introduced flexible work arrangements, or implemented new technology like AI. If your handbook doesn't match what employees actually experience day to day, it can quickly lose credibility. Employees notice when policies don't align with reality. Managers feel it too, especially when they're left explaining why the handbook says one thing while the business does another. A strong handbook should accurately represent how your organization operates today, not how it operated several years ago. It's Written for Employees, Not Just Attorneys Legal compliance is essential, but a handbook should also be understandable. If employees struggle to interpret a policy or have to ask HR what it really means, the handbook isn't doing its job. The most effective handbooks use clear, straightforward language without sacrificing accuracy. They answer common questions before they're asked and make it easy for employees to find the information they're looking for. The goal isn't to create a document that sounds impressive. The goal is to create one that people will actually read and reference. It Creates Consistency Across the Organization One of the biggest benefits of a well-written handbook often happens behind the scenes. When managers have a clear, up-to-date resource to rely on, they're more likely to answer questions consistently and apply policies fairly across departments. That consistency matters. Whether an employee is asking about time off, attendance expectations, workplace conduct, or leave policies, they should receive the same answer regardless of who they ask. Without that shared foundation, organizations often find themselves relying on memory, individual judgment, or "how we've always done it," which can lead to confusion and inconsistent employee experiences. It Evolves Alongside Employment Laws Employment laws don't stand still, and neither should your handbook. Federal, state, and local requirements continue to change, particularly in states like New York where employment laws evolve regularly. Even if your internal policies haven't changed, legal requirements may have. Scheduling a periodic handbook review helps ensure your policies remain aligned with current regulations while also giving you an opportunity to identify areas that could be clarified or improved. Rather than waiting several years for a complete rewrite, many organizations find it easier to make smaller updates as their business and legal obligations evolve. Employees Know It Exists and Can Easily Access It Even the best handbook has limited value if employees don't know where to find it. Whether it's provided digitally, through an employee portal, or as part of onboarding, employees should be reminded that the handbook is an active resource, not simply paperwork they signed on their first day. Encouraging employees to reference the handbook before questions arise helps build confidence and often reduces repetitive administrative questions for HR and managers alike. It Supports Your Culture, Not Just Your Policies A handbook isn't only about rules. It's also one of the first opportunities to communicate what your organization values and what employees can expect from working there. Your mission, workplace expectations, communication style, commitment to safety, approach to professional conduct, and philosophy around respect and accountability all help shape the employee experience. When those values are reflected consistently throughout the handbook, it becomes more than a policy manual. It becomes an extension of your workplace culture. A Simple Question Worth Asking If you handed your employee handbook to a new manager today, would they feel confident using it to answer employee questions and make everyday decisions? If the answer is "not quite," it may be time for a closer look. An effective handbook should provide practical guidance, reflect your organization's current practices, support compliance, and serve as a resource that employees and managers actually use throughout the year. More Than a Requirement An employee handbook shouldn't just help satisfy a requirement. It should become one of the most useful resources in your organization for employees, managers, and leadership alike. At Simco, we build customized, New York-compliant employee handbooks designed around each organization's policies, operations, and workforce. Every handbook is developed collaboratively, reviewed for compliance, and supported with ongoing legal updates to help ensure it continues to reflect both current employment laws and the way your business actually operates. A handbook is one of the few HR resources that nearly every employee will interact with. Investing the time to make it clear, accurate, and genuinely useful can benefit your organization long after it's published.

Insurance Tips for a Safe Fourth of July Weekend

July 2, 2026
The Fourth of July is one of the busiest weekends of the summer. Families gather for backyard barbecues, friends spend time on the lake, fireworks light up the night sky, and many people travel to enjoy a long holiday weekend. It's also a time when insurance claims tend to increase. Property damage, boating accidents, grill fires, theft, weather-related losses, and injuries can quickly turn a relaxing weekend into an expensive one. While no one wants to think about insurance during a holiday, taking a few minutes to prepare beforehand can help you avoid unnecessary stress later. Here are several areas worth reviewing before the celebrations begin. Review Your Home Before Guests Arrive If you're hosting family or friends, your home naturally becomes the center of activity. Walk around your property as if you were seeing it for the first time. Look for uneven walkways, loose deck boards, damaged railings, poor lighting, or tree limbs that could become hazards. These small maintenance items are easy to overlook during everyday life, but they become more important when your property is full of guests. For more on hosting-related liability, you can read our recent blog here . It's also a good time to make sure smoke detectors and carbon monoxide detectors are working properly, especially if you'll be grilling or using outdoor cooking equipment. Think Beyond the Grill Backyard grilling is one of the most popular Fourth of July traditions, but it also contributes to thousands of residential fires each year. Keep grills several feet away from your home, deck railings, fences, and overhanging branches. Never leave a grill unattended, and keep a fire extinguisher nearby in case something unexpected happens. If you're using propane, inspect hoses and connections before lighting the grill. A quick inspection takes only a minute but can prevent much larger problems. Fireworks and Your Insurance Many homeowners assume their insurance automatically covers any damage caused by fireworks. The reality is more nuanced. Whether damage is covered often depends on how the fireworks were being used, whether they were legal in your area, and the circumstances surrounding the incident. Even if you plan to attend a public fireworks display instead of lighting your own, remember that neighbors may not make the same choice. It's worth understanding what your homeowners policy covers before the holiday arrives, rather than trying to answer those questions after an accident. Spending the Weekend on the Water? Here in the Finger Lakes, many families spend Independence Day boating, kayaking, paddleboarding, or using personal watercraft. Before heading out, take a few minutes to confirm: Your boat registration is current. Required safety equipment is onboard. Life jackets are available for every passenger. Your insurance policy reflects how you actually use your boat. Some homeowners are surprised to learn that watercraft coverage under a standard homeowners policy is often limited. Smaller items like canoes, kayaks, or small sailboats may have some protection, but coverage can depend on the size of the watercraft, horsepower, value, and how it is being used. Larger boats, personal watercraft, and higher-value equipment often require a separate boat policy or additional endorsement. If you purchased a boat, jet ski, trailer, upgraded motor, or new equipment since last summer, now is the time to review whether your coverage matches what you actually own and how you plan to use it. Protect Outdoor Investments Outdoor living spaces have become significant investments for many homeowners. Patio furniture, grills, outdoor kitchens, televisions, landscaping, pergolas, and other backyard improvements all add value to your property. Before leaving for the weekend or during periods of severe weather, secure or store loose outdoor items that could become damaged or cause damage to neighboring property. If you're traveling, consider bringing portable electronics inside and using timers on interior lights to make your home appear occupied. Summer Storms Can Arrive Without Warning The Fourth of July often brings afternoon thunderstorms across our region. High winds, heavy rain, hail, and lightning can cause roof damage, fallen trees, power outages, and flooded basements. If severe weather is in the forecast: Secure outdoor furniture. Charge phones and backup batteries. Move vehicles into a garage when possible. Check gutters and nearby storm drains for debris. Review your emergency contact information. While you can't control the weather, a little preparation can reduce both damage and disruption. A Good Time to Review Your Coverage Holiday weekends often remind us just how much we have to protect. Whether it's your home, your boat, your vehicles, or the memories you're making with family and friends, insurance works best when it's reviewed before it's needed. If it's been a few years since you've looked closely at your homeowners, auto, or recreational vehicle coverage, this can be a good opportunity to make sure your policies still reflect your current lifestyle. Enjoy the Weekend with Confidence Independence Day is meant to be enjoyed, not spent worrying about what could go wrong. A little preparation today can help you focus on what matters most: spending time with family, making memories, and celebrating safely. At Simco Insurance & Wealth Management , we're proud to help individuals and families throughout the Finger Lakes protect what matters most. If you have questions about your homeowners, auto, boat, or other personal insurance coverage, our team is always happy to review your policies and help you understand your options before the unexpected happens.

Have a question? Get in touch.