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New York Increases the Salary Level Threshold for Mandatory Direct Deposit

Article 6 of New York’s Labor Law has been amended (SB 5572) to increase the earnings threshold for the applicability of certain provisions of the law relating to the method and frequency of wage payments to employees, specifically mandating the use of direct deposit and paying employees less frequently than on a semi-monthly basis. The amendment takes effect March 13, 2024.

Due to the amendment, that law will require salary exempt employees to be paid a minimum salary of $1,300 per week (previously $900 per week) to mandate the use of mandatory direct deposit and to pay wages on a monthly basis.

The increased salary threshold in New York State for certain exemptions under Article 6 of the New York Labor Law should not be confused with the requirements under federal and state law to determine exempt versus non-exempt status based on job duties and minimum salary level requirements.

Next Steps

Employers who mandate direct deposit and/or have a monthly pay frequency for exempt employees will need to review the earnings of employees and make adjustments to their processes or practices that no longer align with the requirements of the law by the effective date. This may include making direct deposit optional and paying exempt employees who are paid less than $1,300 per week at least semi-monthly.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.