Check to See if the Minimum Required Salary For Exempt Employees is Increasing In Your State

While the minimum salary requirements for “white collar” employees (executive, administrative, or professional employees) is not changing in 2018 (at least not until/unless the Department of Labor announces a new Overtime Rule), there are several states where the minimum salary requirements for exempt employees is increasing in 2018 (December 31st for New York employers).

These increases (i.e. in Alaska, California, Colorado, Maine, New York, and Oregon) are occurring because the minimum exempt salary rates for these employees (as established under state law) are scheduled to increase in 2018 (December 31st for New York employers).

Under the Fair Labor Standards Act (FLSA), the minimum salary requirements for white collar employees is as follows:

Payment Schedule Minimum Salary
Weekly $455
Bi-Weekly $910
Semi-Monthly $985.83
Monthly $1,971.66
Annual $23,660

The below table sets forth the changes to the minimum salary requirements for exempt employees in these states.  In those instances where the state minimum salary requirements are lower than the above-listed FLSA requirements, the higher salary threshold applies for employers who are subject to FLSA in order for employees to qualify for an exemption under the FLSA.

Alaska
Applicable Law: An individual employed in a bona fide executive, administrative, or professional capacity shall be compensated on a salary or fee basis at a rate of not less than two times the state minimum wage for the first 40 hours of employment each week, exclusive of board or lodging that is furnished by the individual’s employer. Alaska Stat. § 23.10.055(b).

 

Since Alaska’s minimum wage is increasing to $9.84 per hour starting January 1, 2018, the minimum salary for exempt employees is increasing as follows:

Payment Schedule 2017 Minimum Salary 2018 Minimum Salary
Weekly $784 $787.20
Bi-Weekly $1,568 $1,574.40
Semi-Monthly $1,698.67 $1,705.60
Monthly $3,397.34 $3,411.20
Annual $40,768 $40,934.40
California
Applicable Law: Overtime-exempt executive, administrative and professional employees must earn a monthly salary equivalent to at least two times the state minimum wage for full-time employment. IWC Wage Orders.

 

Since California’s minimum wage is increasing to $10.50 per hour (for employers with 25 or less employees) and $11.00 per hour (for employers with 26 or more employees) starting January 1, 2018, the minimum salary for exempt employees is increasing as follows:

Small Employers (25 or less employees)
Payment Schedule 2017 Minimum Salary 2018 Minimum Salary
Weekly $800 $840
Bi-Weekly $1,600 $1,680
Semi-Monthly $1,733.34 $1,820
Monthly $3,466.67 $3,640
Annual $41,600 $43,680
Large Employers (26 or more employees)
Payment Schedule 2017 Minimum Salary 2018 Minimum Salary
Weekly $840 $880
Bi-Weekly $1,680 $1,760
Semi-Monthly $1,820 $1,906.67
Monthly $3,640 $3,813.34
Annual $43,680 $45,760
Colorado**
Applicable Law: Exempt executive/supervisory employees must be a salaried employee earning in excess of the equivalent of the minimum wage for all hours the employee worked in a workweek. Colorado Minimum Wage Order.

 

Note: The administrative and professional exemptions only require that an employee be a “salaried individual” and does not provide a minimum salary requirement.

 

Since Colorado’s minimum wage is increasing to $10.20 per hour starting January 1, 2018, the minimum salary for exempt executive/supervisory employees is increasing as follows:

Payment Schedule 2017 Minimum Salary* 2018 Minimum Salary*
Weekly $372 $408
Bi-Weekly $744 $816
Semi-Monthly $806 $884
Monthly $1,612 $1,768
Annual $19,344 $21,216
* These numbers are based on the employee working 40 hours per week.  If the employee works more than 40 hours per week, the required pay will be greater.
** In order for an executive employee to meet the minimum salary requirement under the FLSA, the employee will need to be paid the FLSA minimum salary.  However, once that employee works over 44.6 hours in a week, the state minimum wage salary requirement will apply.
Maine
Applicable Law: The minimum salary requirement to qualify for an executive, professional or administrative exemption is 3,000 times the Maine minimum hourly wage or the minimum salary required by the federal Fair Labor Standards Act, whichever is higher. 26 M.R.S 663(3)(K).

 

Currently, the state threshold is higher than the FLSA threshold; therefore, the state threshold applies.

 

Since Maine’s minimum wage is increasing to $10.00 per hour starting January 1, 2018, the minimum salary for exempt employees is increasing as follows:

Payment Schedule 2017 Minimum Salary 2018 Minimum Salary
Weekly $519.23 $576.92
Bi-Weekly $1,038.46 $1,153.84
Semi-Monthly $1,125 $1,250
Monthly $2,250 $2,500
Annual $27,000 $30,000
New York – INCREASES 12/31/2017
Applicable Law: Exempt executive and administrative employees must be paid at least the minimum salary set forth in the applicable New York Wage Orders.

 

Note: There is no salary basis test for professional employees under New York law.

 

Under the amendments to the New York Wage Orders, the minimum salary for exempt executive and administrative employees is increasing on December 31, 2017 as follows:

New York City (11 or More Employees)
Payment Schedule Current Minimum Salary Minimum Salary On 12/31/17
Weekly $825 $975
Bi-Weekly $1,650 $1,950
Semi-Monthly $1,785.50 $2,112.50
Monthly $3,575 $4,225
Annual $42,900 $50,700
New York City (10 or Fewer Employees)
Payment Schedule Payment Schedule Payment Schedule
Weekly $787.50 $900
Bi-Weekly $1,575 $1,800
Semi-Monthly $1,706.25 $1,950
Monthly $3,412.50 $3,900
Annual $40,950 $46,800
Nassau, Suffolk & Westchester Counties
Payment Schedule Payment Schedule Payment Schedule
Weekly $750 $825
Bi-Weekly $1,500 $1,650
Semi-Monthly $1,625 $1,787.50
Monthly $3,250 $3,575
Annual $39,000 $42,900
Remainder of State
Payment Schedule Payment Schedule Payment Schedule
Weekly $727.50 $780
Bi-Weekly $1,455 $1,560
Semi-Monthly $1,576.25 $1,690
Monthly $3,152.50 $3,380
Annual $37,830 $40,560
Oregon*  – INCREASES 7/1/2018
Applicable Law: The minimum salary requirement to qualify for an executive, professional or administrative exemption is the applicable minimum wage multiplied by 2,080 hours per year and then divided by 12 months. Or. Rev. Stat. § 653.010(9).

 

Since Oregon’s minimum wage is increasing to $10.50 per hour (for employers in “nonurban counties”), $12.00 per hour (for employers in the Portland metropolitan area), and $10.75 per hour (for the remainder of the state) starting July 1, 2018, the minimum salary for exempt employees is increasing as follows:

Nonurban Counties (Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, and Wheeler counties)
Payment Schedule Current Minimum Salary Minimum Salary On 7/1/18
Weekly $400 $420
Bi-Weekly $800 $840
Semi-Monthly $866.67 $910
Monthly $1,733.34 $1,820
Annual $20,800 $21,840
Portland Metropolitan Area
Payment Schedule Current Minimum Salary Minimum Salary On 7/1/18
Weekly $450 $480
Bi-Weekly $900 $960
Semi-Monthly $975 $1,040
Monthly $1,950 $2,080
Annual $23,400 $24,960
Remainder of the State
Payment Schedule Current Minimum Salary Minimum Salary On 7/1/18
Weekly $410 $430
Bi-Weekly $820 $860
Semi-Monthly $888.34 $931.67
Monthly $1,776.67 $1,863.33
Annual $21,320 $22,360
NOTE:  Currently, all employers must pay the FLSA minimum salary in order for to qualify for an executive, professional or administrative exemption.  However, starting July 1, 2018, the state minimum salary threshold for exempt employees in the Portland metropolitan area will be greater than the FLSA threshold.

 

While not increasing, the minimum salary requirements to qualify for an executive, professional or administrative exemption is higher than the FLSA threshold in the following states:

Connecticut
Applicable Law: The minimum salary requirement to qualify for an executive, professional or administrative exemption is $475 per week. Regs., Conn. State Agencies § 31-60-14.
Payment Schedule Current Minimum Salary
Weekly $475
Bi-Weekly $950
Semi-Monthly $1,029.17
Monthly $2,058.33
Annual $24,700
Iowa
Applicable Law: The minimum salary requirement to qualify as a “high-salaried” executive, professional or administrative employee (and qualify for an exemption from overtime if the duties test is also met) is $500 per week. 875 Iowa Admin. Code 218.1-218.3.
Payment Schedule Current Minimum Salary
Weekly $500
Bi-Weekly $1,000
Semi-Monthly $1,083.34
Monthly $2,166.67
Annual $26,000

 

Recommendation for Employers

It is recommended that employers in these states verify that their exempt employees are receiving at least the minimum salary requirement to qualify for the exemption.

Also, please remember that meeting the salary requirement is just one element needed to qualify for an exemption from overtime.  The employee in question must also meet the duties test and the salary basis test.