In New York, employees who work overtime are entitled to overtime pay, also known as overtime compensation or ‘time and a half.’ However, there are some instances when overtime pay doesn’t apply to certain employees. This article discusses what overtime pay is and explains which groups of employees are exempt from it.
What is Overtime Pay?
Overtime pay, or time and a half, is the rate of pay the majority of employees are entitled to when they work more than their standard 40 hours in a workweek. For instance, if an employee is eligible to receive overtime pay and their regular workweek consists of 40 work hours, working 60 hours in the same week means they will earn overtime pay for those additional 20 hours. Overtime laws in New York are designed to prevent employees from being exploited by their employers, with hourly-wage earners, especially those workers in blue-collar industries, being the mainly protected group.
How Does it Work?
An employer pays an employee their normal rate for the first 40 hours worked in a week but, for every overtime hour an employee works beyond the 40 hours, an employer must pay them an hourly rate plus 50%.
The standards for overtime pay and minimum wages are regulated by the Fair Labor Standards Act (FLSA). Nevertheless, not all employers are required to give overtime pay. Companies that bring in less than $500,000 in annual sales may not have to pay overtime compensation under the FLSA. However, no such financial requirement is necessary under the New York State Labor Law.
Overtime Pay Exemptions
Overtime laws and a couple of other wage and workplace protections, like rest break and meal period laws, do not apply to some types of employees. Those employees fall under an ‘exempt’ group of workers, and they will not get overtime wages, even if they work more than eight hours in a day or more than the standard 40 hours in a workweek. Employees who are not covered by overtime laws typically have a lot of responsibility within their companies and have significant input into the workings of that company. But, employees aren’t exempt because an employer has said they are exempt or because they are giving a specific title to the employee or pay them by the week or month.
How Much an Employee Needs to Make to be Considered an Exempt Employee?
State overtime laws do not cover a specific type of employees, namely those who have professional, managerial, administrative, or executive roles. These workers are considered to be exempt from overtime pay and other wage-and-hour protections.
To be exempt from any of these categories under New York state overtime law, an employee must earn twice the minimum wage for their full-time work. The following list displays the minimum weekly and annual wage an employee must make in a year to be properly classified as exempt in New York, depending on the size of their employer. If an employee earns less than the listed amount (salary threshold), they are exempt, and overtime laws will apply to them. If they make more than the amount listed here, their employer must prove their non-exempt status in order for them to be a non-exempt employee.
- New York City, 11 or more employees – $1,125.00 per week ($58,500.00 per year);
- New York City, 10 or fewer employees – $1,125.00 per week ($58,500.00 per year);
- Nassau, Suffolk, and Westchester counties, regardless of the size of employer – $1,050.00 per week ($54,600.00 per year);
- The remainder of State, regardless of the size of employer – $937.50 per week ($48,750 per year).
Are You Exempt from Overtime Laws as a Professional Employee?
Aside from making twice the state minimum wage, a professional employee must also either spend at least half of work hours doing work in a field generally considered a ‘learned or artistic profession,’ or spend half of their working time doing tasks in one of the following licensed/certified professions:
- Medicine (doesn’t include nurses);
- Law (in some cases including law school graduates but not paralegals);
- Dentistry (doesn’t include dental hygienists);
- Teaching; and
- Accounting (includes only certified public accountants).
For a job position to be considered a ‘learned or artistic profession,’ an employee must have a specialized college degree or pursue other paths of intellectual study. A job can also be exempt if the work is original, creative, and depends primarily on the employee’s own invention, talent, or imagination. Some computer and high-tech industry employees will fall into this category. In addition to this, in order to be exempt, an employee must regularly exercise discretion and independent judgment over important matters.
Are You Exempt as an Administrative Employee?
To be exempt as an administrative worker, an employee must make twice the minimum wage and be able to answer ‘yes’ to the following requirements:
- Are they regularly allowed to make independent decisions without direct supervision about the important matters in the company?
- Do they spend more than half of their time on administrative tasks of substantial importance to management?
Additionally, they must be able to answer ‘yes’ to one of these three questions:
- Do they regularly and directly help the company owner or another manager or administrator?
- Do they perform work that requires experience, special training, and knowledge without direct supervision (or with minimal supervision)?
- Do they perform special tasks that require them to make decisions that affect the company?
Are You Exempt from Overtime Laws as a Managerial or Executive Employee?
As with the previous categories, these employees must make twice the state minimum wage to be exempt from overtime pay, however, they also must be able to answer ‘yes’ to these requirements:
- Are they spending more than half of their time either managing a certain department or subdivision of the company or doing managerial work (assigning work to others, supervising, evaluating employees, planning work, keeping records, controlling the flow of supplies and merchandise, etc.)?
- Are they allowed to make independent decisions without supervision about important company matters?
- Do they regularly supervise the work of two or more full-time employees?
- Do they make recommendations about the hiring or firing of employees and have the authority for those recommendations to be taken seriously?
Are You Exempt as an Outside Sales Employee?
If an employee’s job is classified as an Outside Sales position, then their primary duty is to make sales or take orders outside their company’s main workplace. These employees can be paid either on a salary basis or commission-based structure, but they need to spend more than 20% of their time performing work other than sales to fall under this category.
Because of their pay rate and the type of work they do, exempt employees are not eligible for overtime pay for hours worked over 40 in a week. But, if they don’t fall under any of the categories mentioned above, their employer is required by New York law to pay them overtime compensation for all overtime hours worked.
To find out whether you have a case worth pursuing, feel free to contact Cilenti & Cooper today. We treat every case with the attention and care it deserves and can fight for your rights from beginning to end. We offer a free consultation to all of our prospective clients, so you have nothing to lose.