Employee Benefit Guidance & Compliance Solutions

2020 – New Rules for Salaries and Wages

Posted by on January 3, 2020 in Human Resources

2020 – New Rules for Salaries and Wages
By Maggie Johnson

As we start the new year, there are a number of changes in employment law affecting the payment of salaries and wages by New York and New Jersey employers. Here’s an overview of the new regulations.

Overtime Exemptions
The US Department of Labor has issued a final rule for overtime exemptions effective January 1, 2020. The salary test under federal law for exemption from the Fair Labor Standards Act (FLSA) now requires a minimum salary of $684 per week up from $485 per week. Under the highly compensated employee test, the minimum annual salary must be $107,432 increased from $100,000.

Pre-Employment Salary History Questions
Starting on January 1, 2020, employers in New Jersey are prohibited from requesting job applicants to answer questions about their current or previous salary or wages. There are exceptions for positions where federal law requires such information to be disclosed or in cases where wages and salaries are publicly available. The job applicant may also voluntarily share the salary information with the employer. Salary history may be confirmed, but only after the job offer is made.

New York’s similar law is effective January 6, 2020. It also prohibits employers from asking job applicants about their salary or wages at current or former jobs, or using that information to decide whether to make a job offer or to refuse to interview an applicant.

Pre-Employment Testing
Employers who hire employees in New York City should also note that pre-employment testing for marijuana will be banned in that city effective May 2020. There are exceptions for certain job applicants. For example, police officers, commercial drivers, teachers, construction workers, those who care for patients in medical nursing homes. Although the new law prohibits pre-employment marijuana testing, it does not excuse an employee from going to work under the influence of marijuana or prohibit drug testing current employees.

Pre-Tax Commuter Benefits
The state of New Jersey’s commuter benefit law goes into effect on March 1, 2020. It applies to any employer who employs 20 or more workers in New Jersey. The law requires applicable employers to offer pre-tax commuter benefits to its employees for certain eligible commuter expenses such as the purchase of transit passes. Employers will be subject to a $250 penalty for each 30-day period of non-compliance. New York City has had a similar commuter benefit law in place for the last few years. It became effective on January 1, 2016.

Minimum Wage
On January 1, 2020, the minimum wage in the state of New Jersey increases by one dollar from $10 per hour to $11 per hour. The minimum wage will increase by one dollar per hour every January 1 until it reaches $15 per hour on January 1, 2024.

Also on January 1, 2020, the minimum wage in New York City must be at least $15 per hour for workers in all businesses. In New York state, outside of New York City, the minimum wage is $11.80 per hour. Again, on December 31, 2020, in New York state the minimum wage will increase to $12.50 per hour.

The above is a summary of employment law changes related to salary and wages for the beginning of 2020. There are other employment and labor law changes that apply to other areas of the employment relationship. It’s important to keep your employee handbook up-to-date to reflect current employment and labor law, and to make sure you have the required notices located in prominent places so your employees know of new regulations.

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