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.
Understanding New York Overtime Law
New York employers must navigate both state and federal regulations to ensure compliance with overtime laws, thereby avoiding legal and financial repercussions.
General Requirements for New York Overtime Law
Compliance with Multiple Regulations
Employers in New York must adhere to the Fair Labor Standards Act (FLSA) and the New York Minimum Wage Order. This dual compliance ensures that employees are adequately compensated for overtime hours.
Overtime Pay Rate
- Standard Employees: Typically, employees are entitled to 1.5 times their regular hourly rate for any time worked beyond 40 hours in a single workweek.
- Residential Employees: Certain residential employees receive overtime pay at 1.5 times their regular rate for any hours worked over 44 in a workweek.
Calculating Pay Rate for Variable Hours
If an employee’s pay rate fluctuates, employers must calculate the overtime pay based on the average hourly rate across the workweek. This ensures fair compensation even when regular hours vary.
Exemptions
While some professions may be exempt from federal overtime requirements under the FLSA, they may still be eligible for overtime under New York state law. Employers should thoroughly review both sets of regulations to determine eligibility accurately.
By adhering to these guidelines, New York employers can maintain compliance and ensure fair treatment of their employees. Ensure to stay updated with the latest regulations to avoid penalties and foster a positive workplace environment.
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.
When determining an employee’s regular rate of pay, certain types of payments are excluded. Here’s what doesn’t count:
- Reimbursements for Expenses: Any payments made to cover expenses an employee incurs on behalf of the employer.
- Overtime Premiums: Extra pay received for working more than the standard hours, often above 40 hours per week.
- Weekend and Holiday Premiums: Additional compensation for work performed during weekends, holidays, or special non-working days.
- Discretionary Bonuses: Bonuses given at the employer’s discretion, not tied to any performance criteria or contractual obligation.
- Gifts and Special Occasion Payments: Monetary gifts or similar payments for special occasions, not related to job performance.
- Non-Work Period Payments: Compensation for times when the employee isn’t working, such as during vacations, holidays, or instances of illness.
By excluding these payments, the calculation strictly reflects the regular earnings for standard duties, ensuring adherence to fair labor practices.
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.
Occupations Exempt from New York Overtime Requirements
Yes, several occupations are exempt from New York’s overtime requirements, even if they are also exempt under the Fair Labor Standards Act (FLSA). Here’s a breakdown of those roles:
Exempt Occupations:
- Executive Employees
- Administrative Employees
- Professional Employees
- Outside Salespeople
- Individuals Working for Federal, State, or Municipal Government
Additionally, the following workers are also exempt from New York overtime standards:
- Farm Laborers
- Certain Volunteers, Interns, and Apprentices
- Taxicab Drivers
- Members of Religious Orders
- Individuals Working for Religious or Charitable Institutions
- Camp Counselors
- Workers for Fraternities, Sororities, Student or Faculty Associations
- Part-time Babysitters
Special Cases:
Government Workers: While overtime rules do not generally apply to those working for federal, state, or municipal governments, they do extend to employees of charter schools, private schools, not-for-profit organizations, and non-teaching staff in school districts.
It’s important to note that employers may choose to pay overtime to exempt employees at their discretion. However, this does not apply to elective officers or other officers excluded by law, as well as public employees under the jurisdiction of General Municipal Law 90.
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).
How is the Regular Rate of Pay Calculated for Salaried Employees Who Work More Than 40 Hours a Week?
Calculating the regular rate of pay for salaried employees who exceed a 40-hour workweek involves a few straightforward steps. Here’s a clear guide to understanding this process:
- Determine the Weekly Salary: Start by identifying the employee’s weekly salary. For instance, let’s assume the salary is $405 for simplicity.
- Identify the Total Hours Worked: Next, ascertain the total number of hours the employee is expected to work each week. In this case, let’s use 45 hours.
- Calculate the Regular Hourly Rate: Divide the weekly salary by the total hours worked to find the regular hourly rate. For example, $405 divided by 45 hours gives a regular hourly rate of $9.00.
- Compute the Overtime Rate: Overtime pay typically includes an additional 50% of the regular hourly rate. Therefore, the overtime rate would be $9.00 (regular hourly rate) plus $4.50 (50% of the regular rate), totaling $13.50 per hour.
- Apply the Overtime Rate to Overtime Hours: Finally, multiply the overtime rate by the number of overtime hours worked. In this scenario, if the employee works 5 hours of overtime, they would earn $13.50 per hour for those 5 hours.
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);
- Optometry;
- Architecture;
- Law (in some cases including law school graduates but not paralegals);
- Engineering;
- 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.
Exceptions to Overtime Exemption for Government Employees
While employees working for Federal, State, or Municipal governments are generally exempt from overtime requirements, there are notable exceptions you should be aware of:
- Charter Schools: Employees here are covered by overtime laws.
- Private Schools: Staff at these institutions are not exempt and must adhere to overtime regulations.
- Not-for-Profit Corporations: Workers in these organizations also fall under the scope of overtime laws.
- Non-Teaching School District Employees: Staff members who do not serve in teaching roles within school districts are required to comply with overtime requirements.
How Does New York Labor Law Interact with the Fair Labor Standards Act (FLSA)?
New York Labor Law and the Fair Labor Standards Act (FLSA) work together to create a comprehensive framework for employee rights and employer responsibilities. Here’s how they interact:
- Compliance Requirements: Employers in New York must adhere to both federal and state regulations. While the FLSA establishes baseline standards for wages and overtime, New York has its own Minimum Wage Order that can impose stricter requirements.
- Minimum Wage: The FLSA sets a federal minimum wage, but New York often mandates higher state minimum wages. Employers must pay the higher of the two rates to ensure compliance.
- Overtime Rules: Both the FLSA and New York Labor Law require employers to pay overtime. However, New York may have additional rules about who qualifies for overtime pay and how it should be calculated.
- Record-Keeping: Employers are required to maintain precise records under both laws. While the FLSA has specific guidelines, New York also requires detailed documentation of hours worked and wages paid to ensure adherence to its standards.
By understanding the nuances of both the FLSA and New York Labor Law, employers can better navigate their obligations and ensure they are fully compliant with all regulations.
Conclusion
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.
