Exempt vs. Non-Exempt in NYC: Salary, Duties, and Misclassification

In New York City, whether you are exempt or non-exempt from overtime comes down to two tests applied together: a salary threshold and a duties analysis. As of January 1, 2026, an employee classified as exempt under the executive or administrative categories must earn at least $1,275 per week, which works out to $66,300 a year, and must actually perform the kind of work the exemption describes.¹ Fall short on either test and you are non-exempt, which means you are legally owed overtime, the full state minimum wage, and some protections federal law does not provide.

The distinction matters because exempt workers do not get overtime no matter how many hours they work, while non-exempt workers must be paid time-and-a-half for every hour past 40 in a workweek. Employers get this wrong often, and the back pay available to a misclassified worker in New York stretches six years.

The NYC Salary Threshold

The salary floor for the executive and administrative exemptions in New York City is $1,275.00 per week for employers of any size, effective January 1, 2026.¹ That is substantially higher than the federal Fair Labor Standards Act floor of $684 per week, or $35,568 a year, which remains in place after a federal court struck down the Department of Labor’s 2024 increase.² When state and federal rules differ, the one more protective of the worker controls, so in NYC the $1,275 figure is what matters.

A dollar below $1,275 and the exemption fails, regardless of job title. The salary also has to be paid on a “salary basis,” meaning you receive the full predetermined amount for any week in which you perform work. Your employer cannot cut that amount because the quality or volume of your work varied during the pay period.³

Deductions are tightly limited. An employer can dock pay for a full-day absence taken for personal reasons, or for a full-day disciplinary suspension imposed in good faith for a workplace conduct violation. Docking for partial-day absences or for the quality of your work is not allowed. Employers who make improper deductions as a pattern can lose the exemption for every employee in the same job category, not just the one who was shorted.³

The Duties Test

Clearing the salary bar is only half the analysis. Your actual day-to-day work has to fit one of the recognized exemption categories, and a job title alone never decides it.⁴ This is where most misclassification happens: employers see the salary number, slap on an “exempt” label, and skip the harder question of what the employee actually does.

Executive

Your primary duty must be managing the business or a recognized department within it. You have to regularly direct the work of at least two full-time employees, or the part-time equivalent. And you need genuine authority to hire or fire, or your recommendations on hiring, firing, and promotions have to carry real weight.⁵ A shift supervisor who passes along a schedule but has no say in who gets hired or let go does not qualify, even if a dozen workers report to them.

Administrative

This covers employees whose primary work is office or non-manual work directly related to management or general business operations. The job must require the regular use of independent judgment and discretion on matters of real significance to the company.⁶ It is also the most litigated exemption because the line between exercising discretion and following established procedures is blurry. An HR manager setting company policy likely qualifies. An assistant processing paperwork against a template does not, even though both do “office work.”

Professional

The learned professional exemption applies when your primary work requires advanced knowledge in a field of science or learning, typically acquired through a prolonged course of specialized academic instruction. The work has to be mainly intellectual and require consistent independent judgment.⁷ Lawyers, physicians, engineers, and architects are the classic examples. Skilled tradespeople generally do not qualify, because their expertise comes from apprenticeship and on-the-job training rather than academic study.

Two Categories That Follow Different Rules

Computer professionals and outside salespeople sit under the exempt umbrella but operate on their own terms.

Systems analysts, programmers, and software engineers may be exempt if their primary duty involves designing, developing, testing, or documenting computer systems or programs. They can be paid salary at the standard threshold or hourly at a federal minimum of $27.63 per hour.⁸ For salaried computer professionals in NYC, the $1,275 weekly figure typically controls. Workers whose main job is hardware repair, operating computers, or entering data do not qualify.

Outside sales has no minimum salary requirement at all. The test is where and how you work: your primary duty must be making sales or obtaining contracts, and you must regularly do that work away from your employer’s place of business, at client sites or on the road.⁹ Sales by phone, email, or online do not count toward the exemption, even if you work from home. A home office used for phone solicitation is treated as the employer’s place of business.

What Non-Exempt Status Gets You

If you do not meet both the salary and duties tests, you are non-exempt, and New York law gives you a strong floor of wage protections.

Every non-exempt worker in New York City must be paid at least $17.00 per hour as of January 1, 2026.¹⁰ Once your workweek total passes 40 hours, your employer owes overtime at one and a half times your regular rate.¹¹

Watch the “regular rate” calculation. It is not just your base hourly wage. Non-discretionary bonuses, shift differentials, and commissions earned during the week have to be folded in before the overtime multiplier is applied.¹² A worker making $20 an hour plus a $200 weekly production bonus has a regular rate above $20, and their overtime rate rises with it.

New York also has a protection federal law lacks: spread-of-hours pay. If your workday stretches more than 10 hours from start to finish, counting meal breaks and any gap between shifts, your employer owes you one extra hour of pay at the basic minimum wage. That is on top of your regular wages, and it applies even if you did not work the full stretch continuously.¹³ Clock in at 8 a.m., leave at 7 p.m. with an unpaid lunch, and your spread is 11 hours. You are owed the extra hour.

What Misclassification Is Worth

Labeling someone exempt who does not actually qualify is one of the more expensive mistakes an NYC employer can make, and the window for a worker to claim what they are owed is long.

Under New York law, an employee can recover unpaid overtime and minimum wages going back six years. On top of that, liquidated damages of up to 100% of the unpaid wages are available, effectively doubling the amount owed, unless the employer can prove it acted in good faith. Willful violations of the equal pay provisions can push liquidated damages to 300%. Workers also recover attorney’s fees and prejudgment interest.¹⁴

Federal law gives a shorter window: two years for standard violations under the FLSA, or three years for willful ones.¹⁵ Employees often file under both state and federal law to maximize recovery, and the six-year state lookback is almost always the larger number. Individual owners and managers who controlled pay decisions can also face personal liability for the full amount owed, not just the company.

Checking Your Own Status

If you are trying to work out whether you have been classified correctly, run both tests yourself.

Start with gross weekly pay. If you are salaried and earn less than $1,275 per week, you should be non-exempt and getting overtime. Nothing further to analyze.¹

If your salary clears the threshold, look at what you actually do. Do you manage at least two people and have meaningful input on who gets hired or fired? That is the executive test. Do you make real independent judgment calls on matters that affect the business, rather than following a set procedure? That is the administrative test. Does your job require an advanced degree in a specialized field? That is the professional test.⁴ If neither the salary nor the duties line up, you are likely owed overtime going back as far as six years.

Workers who believe they have been misclassified can file a complaint with the New York State Department of Labor or bring a private lawsuit. Filing with the DOL does not block a court action. Given the six-year lookback and the liquidated damages available, even someone who left a job several years ago may still have a viable claim.¹⁶

1
New York State Department of Labor. Minimum Wage Frequently Asked Questions
2
U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption
3
U.S. Department of Labor. Fact Sheet 17G: Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act
4
U.S. Department of Labor. Fact Sheet 17A: Exemption for Executive, Administrative, Professional, Computer and Outside Sales Employees Under the Fair Labor Standards Act
5
U.S. Department of Labor. Fact Sheet 17B: Exemption for Executive Employees Under the Fair Labor Standards Act
6
U.S. Department of Labor. Fact Sheet 17C: Exemption for Administrative Employees Under the Fair Labor Standards Act
7
U.S. Department of Labor. Fact Sheet 17D: Exemption for Professional Employees Under the Fair Labor Standards Act
8
U.S. Department of Labor. Fact Sheet 17E: Exemption for Employees in Computer-Related Occupations Under the Fair Labor Standards Act
9
U.S. Department of Labor. Fact Sheet 17F: Exemption for Outside Sales Employees Under the Fair Labor Standards Act
10
NYC Business. Wage Regulations in New York State
11
U.S. Department of Labor. Overtime Pay
12
U.S. Department of Labor. Fact Sheet 56A: Overview of the Regular Rate of Pay Under the Fair Labor Standards Act
13
New York State Department of Labor. 12 NYCRR 142 – Miscellaneous Industries and Occupations
14
New York State Senate. New York State Labor Law Section 198
15
Office of the Law Revision Counsel. 29 U.S. Code 255 – Statute of Limitations
16
New York State Senate. New York Labor Law Section 198 – Costs, Remedies