NY labor law 2017: Exempt salaries, past pay, police liability

This month brings timely reminders for busy employers that may have missed important new announcements in the midst of the presidential transition and Department of Labor overtime regulation litigation.

Higher exempt salary thresholds

by Richard S. Finkel, Esq., Bond, Schoeneck & King, Garden City

First up, the news that New York state employers have to raise salaries for some exempt workers despite the stalled federal overtime rule. We reported on this last month, before the state regulations were finalized. Now we know that the state had no intention of backing down even in light of the federal litigation.

The New York State Department of Labor published its final rule on Dec. 28, the last workday of 2016. The rule increased the salary threshold applicable to exempt executive and administrative employees in New York State. The new salary levels went live on Dec. 31, 2016.

Under New York’s Labor Law, the salary threshold for executive and administrative employees is now at least $727.50 per week—75 times the current minimum wage of at least $9.70 per hour. With the minimum wage set to gradually increase in coming years (at different rates depending on geography), the NYSDOL has implemented corresponding increases in the applicable salary threshold.

A chart summarizing these thresholds is available on the Department of Labor’s website.

If you have any exempt executive or administrative employees who are currently paid less than the applicable salary threshold set forth above, you must increase their salary to at or above that threshold or reclassify them as nonexempt.

Pay equity in NYC: 1 less question to ask

The movement for pay equity is taking hold in New York City. Starting at the end of 2016, it became unlawful for New York City government agencies to ask job applicants about their salary histories.

Mayor Bill de Blasio signed an executive order in November 2016 that blocks city agencies from asking about an applicant’s previous compensation before extending a job offer. In a statement that accompanied the signing, the mayor stated, “It’s essential to the success of our agencies and our city as a whole that everyone is treated—and paid—with the fairness and respect they deserve.”

The idea is that employers perpetuate past discrimination if they use the applicant’s last salary to set the new salary rather than relying strictly on skills and experience.

Tort liability for police employers

by John M. Bagyi, Esq., Bond, Schoeneck & King, Albany

Some New York police employers thought paying disability benefits to injured police officers shielded them from those officers’ tort claims. That’s not always true.

Some municipalities opt not to carry costly workers’ compensation coverage for police officers. Some thought that Section 207-c, which provides injured officers with payment of full (tax-free) salary during their absence from work and covers the cost of their medical treatment and health care, was an injured officer’s exclusive remedy against their departments, shielding municipalities from officers’ lawsuits.

The recent New York Court of Appeals holding in Diegelman v. City of Buffalo dispels that notion. The court held that “where the municipal employer has elected not to provide coverage pursuant to the Workers’ Compensation Law, a police officer who suffers a line-of-duty injury caused by the employer’s statutory or regulatory violations may pursue a section 205-e claim.” 

The court evaluated the interplay between Section 207-c, General Municipal Law Section 205-e and the Workers’ Compensation Law. Section 205-e allows police officers to bring tort claims for line-of-duty injuries in certain delineated instances. The Workers’ Compensation Law completely precludes an employee from pursuing a tort claim against his employer for injuries sustained in the course of employment.

The Diegelman majority reasoned that while the language in Section 205-e precludes a tort action by recipients of workers’ compensation benefits, it makes no mention of Section 207-c. The majority also rejected the argument that because of the superior benefits provided by Section 207-c, it “is essentially a super workers’ compensation scheme for police officers.”  The majority also noted that prior judicial efforts to restrict the breadth of Section 205-e had all been met with legislative enactments abrogating those holdings.

Diegelman should serve as a wake-up call. Municipalities that do not provide workers’ compensation coverage for their police officers should reevaluate whether the costs and potential liability inherent in defending police officer tort claims outweigh the cost of securing and providing workers’ compensation coverage.

Richard S. Finkel is a member of Bond, Schoeneck & King, working out of the firm’s Garden City office. John M. Bagyi is a Bond, Schoeneck & King member in Albany.