HR Consulting, Inc.
Courtesy of GTM HR Consulting, Inc.
By Martin Patrick, SPHR, SHRM-SCP
As we approach the start of the new year, key updates to the way you manage your business payroll are on the horizon. Here’s a closer look at four of these changes and how they will affect both employers and employees.
1. Salary Threshold for Certain Wage Protections:
On March 13, 2024, the salary threshold for certain wage protections will increase from $900 to $1,300 per week.
Right now, employers are exempt from some requirements when employing workers in executive, administrative, or professional capacities and whose earnings exceed $900 per week.
These include paying clerical or other workers “not less frequently than semi-monthly;” obtaining the advance, written consent of employees before paying wages via direct deposit; and being guilty of a misdemeanor for failing to provide benefits or wage supplements within 30 days after they are due.
The exemption from these requirements will now apply to employees with earnings that exceed $1,3000 per week.
Employers should review their current payroll practices and make any adjustments to help ensure compliance. For example, an employer could increase employee compensation to meet the new threshold or ensure that employees below the threshold are no longer exempt from these employer obligations.
2. Paid Family Leave Contributions:
New York State employers are required to provide paid family leave (PFL) to covered employees. Paid leave can be taken for various family or medical reasons. The program is paid for by employees through an additional payroll deduction. Or employers can pay the cost on their employees’ behalf.
Beginning January 1, 2024, the employee contribution rate will decrease to 0.373 percent of gross wages. The annual maximum contribution will be $333.25. Employees utilizing PFL benefits will continue to receive 67 percent of their average weekly wage, up to a cap of 67 percent of the New York State Average Weekly Wage (NYSAWW) of $1,718.15 meaning the maximum weekly benefit for 2024 will increase to $1,151.16. Employees earning less than the NYSAWW will contribute less than the annual cap of $333.25, consistent with their actual wages.
3. Minimum Wage Increases:
The minimum wage rate will be on the rise once again across the state. For New York State (outside of New York City, Long Island, and Westchester County), the minimum wage will increase from $14.20/hour to $15/hour on January 1, 2024. In 2025, this rate increases to $15.50/hour and then to $16/hour in 2026.
Starting in 2027, annual minimum wage increases will be based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), keeping pace with inflation and regional living costs.
Employers who pay at or close to minimum wage should evaluate regular and overtime pay rates to make sure they meet the new rates for 2024.
4. Wage Theft Claims:
Governor Hochul recently signed legislation that will go into effect March 13, 2024, limiting the exemption status and expanding the number of employees who can bring claims for wage theft.
With this amendment, employees who make less than $1,300 per week (about $67,600 per year) can bring wage theft claims in court or before the New York State Department of Labor. Previously, only employees who made $900 per week or less could bring such claims before the labor department.
Governor Hochul also signed the Wage Theft Accountability Act, which includes “wage theft” in the definition of larceny. The nonpayment or underpayment of wages will be considered a felony offense.
The aim of these pieces of legislation is to protect employees and their wages. However, employers could now face criminal penalties for noncompliance.
Claims for wage theft include unpaid wages, illegal deductions, unpaid wage supplements, minimum wage, and overtime pay.
Clerical and other non-exempt workers must be paid not less frequently than semi-monthly. Employers must obtain advance written consent before paying wages via direct deposit.
If an employer is found liable for wage theft, potential penalties can range from $500 to $20,000 per offense, depending on the severity of the violation.
New York employers may now have a larger group of employees who can bring wage theft claims and should work with their human resources department to make any necessary changes to payroll procedures before the law goes into effect. For example, employers should obtain written consent for direct deposit from this new group of non-exempt employees.
Updates and information provided by GTM Payroll Services are not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.