On November 4, NYDFS issued an industry letter to entities it regulates under the New York Banking Law updating its April 2017 industry letter on the Exempt Income Protection Act (EIPA) to reflect Labor Law § 652 (which sets NY’s minimum wage rates), as amended by L.2023, c. 56, §§ 1–3 (Part S). The 2017 guidance covered how institutions calculate exempt wages under Article 52 of the New York Civil Practice Law and Rules (CPLR), which uses the greater of the federal or New York State minimum wage to set the amount in a judgment debtor’s account that is exempt from a restraining notice or a levy upon personal property. NYDFS described two changes to Labor Law § 652 that impact how to calculate the exempt wages. First, beginning in 2027, the Commissioner of Labor will set minimum wage rates annually under the formula in Labor Law § 652(1-b), publishing the next year’s rates by October 1, with new rates taking effect on the first of the year. Second, the 2017 guidance provided for a different minimum wage depending on whether the employer was small or large, but since 2024, a single minimum wage has applied to all New York City employers regardless of size.

NYDFS stated that, to comply with CPLR Article 52, an institution should ensure its procedures for handling restraining notices and levies upon personal property applicable to customer accounts use current and correct minimum wage rates. To account for these changes, and because institutions may not have an account holder’s most current employment address, the letter provides a method that does not refer to employer size, replaces the corresponding method in the 2017 guidance, and is intended “to prevent an inadvertent violation of the EIPA.” Under the method: (i) if a banking institution obtains the account holder’s most current employment address “after reasonable due diligence,” it should calculate exempt wages based on that information; and (ii) if it cannot do so, it “may use the highest minimum wage in effect in the State at the time of such calculation.”