While most for-hire vehicle (FHV) operators are independent contractors, every base has office employees. Whether they are dispatchers, bookkeepers, operators or otherwise, all FHV base owners and managers must have employees to help operate their businesses. Every business in the State of New York must be aware of certain provisions of the Labor Law and updates to the law as of January 1, 2026.
New York employers should be aware of increases to the state’s exempt status salary thresholds and minimum wage that took effect on January 1, 2026. Under New York State wage law, employees working in an executive or administrative capacity must receive a minimum weekly salary (as well as meet certain duties and requirements) to be exempt from the state’s overtime pay requirements. As of January 1, 2026, the thresholds for these exemptions are as follows:
- $1,275 per week ($66,300 per year) for employees in New York City and Nassau, Suffolk and Westchester Counties
- $1,199.10 per week ($62,353.20 per year) for employees elsewhere in New York State
These represent increases from the 2025 thresholds of $1,237.50 per week/$64,350 per year (NYC, Long Island and Westchester) and $1,161.65 per week/$60,405.80 per year (remainder of the state).
Also, as of January 1, 2026, the following increases to New York State’s minimum wage took effect:
- $17 per hour for employees in New York City and Nassau, Suffolk and Westchester Counties
- $16 per hour for employees elsewhere in New York State
These represent increases from the 2025 rates of $16.50 per hour (NYC, Long Island and Westchester) and $15.50 per hour (remainder of the state).
Employees in NYC who are paid less than the above amounts generally cannot be treated as exempt under New York’s executive or administrative exemptions, even if their duties are executive or administrative in nature.
Additionally, it is essential to know the difference between exempt and non-exempt employee status in New York. It is critical to know the distinction between the two because it determines who is entitled to overtime, how employees must be paid and tracked and what legal exposure an employer faces if someone is misclassified.
Non-exempt employees in New York are generally entitled to overtime at one and a half times their regular rate for all hours over 40 in a workweek. Exempt employees, by contrast, are not entitled to overtime if they meet the salary threshold and the applicable duties test (executive, administrative, professional, etc.).
If a worker who should be non-exempt is treated as exempt, the employer can owe years of unpaid overtime, liquidated damages, interest and the employee’s attorneys’ fees under FLSA and New York law. New York agencies and task forces actively enforce misclassification, and employers can face civil fines, sanctions and even criminal exposure for willful violations and recordkeeping failures.
Generally, a New York State exempt employee is a worker who is not entitled to overtime under state and federal wage‑and‑hour laws because both a salary threshold and specific duties tests are met. To qualify as exempt, employees generally must be paid on a salary basis (not hourly) and meet a minimum salary level. Also, to qualify as an exempt employee, the worker must perform certain types of higher-level work that satisfy one of the applicable “duties tests” as follows:
- Executive employees: Manage the business or a recognized department, regularly supervise at least two full‑time employees, have genuine input into hiring/firing and are paid a qualifying salary.
- Administrative employees: Perform office or non‑manual work related to management or general business operations, exercise discretion and independent judgment and are paid a qualifying salary.
- Professional employees: Work in a learned or creative profession (for example, lawyers, doctors, some engineers) and meet federal professional‑exemption criteria and salary levels.
Both federal and state law must be satisfied. Where they conflict, the rule more favorable to the employee usually controls. Federal law sets a nationwide minimum salary level for executive, administrative and professional exemptions, but New York has adopted higher thresholds for executive and administrative employees.
It is also essential to keep in mind that non-exempt employees require accurate time records because every compensable hour worked must be counted and paid, including unscheduled or off-the-clock work the employer knows about. Failure to keep accurate time records can lead to costly lawsuits.
For employers, proper classification is a core compliance and risk-management issue that protects against class/collective actions, agency audits and reputational harm in New York’s aggressive enforcement environment.
Based upon the above, it is essential for all New York employers to review their employment and pay practices to ensure compliance with these increasing rates and thresholds that took effect on January 1, 2026.
Any licensed for-hire base can feel free to contact me at any time for more information on how to comply with the law or to determine whether you are in compliance.
