In today’s world, working overtime is often unavoidable, especially when employees are approaching important deadlines or if it’s a busy season and everyone needs to work harder to meet their targets.
People work overtime either because they want to or because they have to. Unfortunately, some companies try to avoid compensating employees for their overtime work. For this reason, we have federal and state laws that govern overtime in New York. Nevertheless, working overtime can be beneficial for employers and employees, and if overtime is not based on abuse, it can be a win-win situation.
In this article, we will discuss what overtime is, when it can be good or bad for you, and whether or not your employer can force you to work mandatory overtime.
What is Overtime Work?
Overtime work refers to any hours an employee works that exceed their regularly scheduled work hours. According to The Fair Labor Standards Act of 1938, the rate of pay an employer must provide for overtime is double an employee’s regular pay rate, or time and a half for hours worked.
However, there are some instances where salaried employees are exempt from receiving overtime pay, typically when they earn a certain salary amount. It is always best for an employee to talk with their human resources manager and review their company’s policy to see their terms for overtime work.
What Are The Perks of Working Overtime?
Working overtime can be beneficial to both employers and employees, provided that New York employment laws are followed. The specific benefits for each party will depend on the industry and the unique job in question. However, there are some basic benefits that both parties can experience:
1. More Money
The most obvious benefit for employees who work overtime is more money. Bigger paychecks can certainly make overtime worthwhile. In New York, employers lawfully must pay non-exempt workers one and a half times their normal rate of pay (instead of their regular rate) for hours worked after 40 in a work week.
New York’s overtime minimum hourly wage is $19.80, one and a half times the regular New York minimum hourly wage of $13.20. So, if an employee making $13.20 per hour works 5 hours overtime in a work week, they would receive $99 in overtime pay.
However, some employees are exempt from New York’s overtime pay law. Salespeople, farm workers, taxi drivers, babysitters, camp counselors, and college students are exempt from overtime law. Additionally, special overtime pay rules apply to restaurant and hotel employees, non-profit employees, domestic workers, and workers in the building services industry.
New York Labor law also requires all employers to provide all new workers with written notice of their regular and overtime hourly pay rates at the time of hiring. Employees must confirm with written notice that they have received and understood that notification.
2. More Money Around the Holidays
Additional money always comes in handy during the holidays. Working overtime on or around holidays could result in extra bonuses from holiday pay. Some companies give large bonuses (up to 50%) for working holiday hours, while others may reward their employees with more vacation days. Employees can often decide which form of compensation they would prefer. More money around holidays can often mean more peace of mind, while more vacation days could allow employees to spend more time with their families.
3. Improved Skills
Working overtime allows employees to polish their skills and gain new and valuable experiences. Employers tend to value the dedication to work and the flexibility shown by staying late, but what they value the most are the skills an employee can offer to support the company. Working overtime can allow you to squeeze in years of experience in a much shorter time.
4. Opportunities for Raise and Promotion
Employers will always notice employees who do the work and don’t mind staying late. Such employees often earn the reputation of being reliable team players and some of the hardest working people in the office. Working overtime can put an employee at the top of the list for a promotion or a raise. Even when an employee is exempt from overtime pay, showing flexibility and staying late in the office can increase the chances of a promotion.
Companies can avoid hiring new people when employees are willing to work overtime. This way, companies can offer more money to existing employees rather than spending money on hiring and paying new employees. With overtime work, companies can also handle employee shortages or busy periods without recruiting more people, which benefits them and their employees.
5. Better Productivity
One major overtime benefit for employers is a more productive workforce. By working more hours, employees increase the level of how much they complete. This allows the company to produce more products or services and deliver them to clients at a faster rate. It is true that when a company thrives, so do all employees.
Helping the company be more successful by working overtime can ultimately help employees in terms of bonuses, raises, incentives, and job stability. A more profitable company can mean better earning opportunities for workers. In the end, clocking in more hours can benefit everyone in the workplace.
When Is Working Overtime Not Worth It?
There are several instances when working overtime is not good for you. They are:
1. When You’re Working Overtime Without Pay or Any Other Benefit
Some companies in industries that are exempt from overtime pay stipulations pay based on results, not caring if it takes an employee 40 or 50 hours to produce those results. Consequently, employees may work however many hours it takes them to finish the task. This can be problematic when employers have unreasonable expectations that can’t possibly be met within a standard 40-hour work week. They may promise promotions or raises, but these often don’t happen. Even when they do, they may amount to much less than an employee would earn if their employer paid them fairly.
2. When You’re Still Overspending
Once that extra money starts pouring in, an employee might start spending more than they normally do. Excess spending is actually a common thing when a person is faced with a sudden surplus of cash. If you catch yourself doing this, working overtime might not be for you.
3. When Your Physical and Mental Health is Affected
Although it pays more, working overtime can affect your health. When you work more than what your body can take, you are risking burnout. If you’re already working eight hours and decide to work three or four hours more, it can add to health issues such as back pain, dry and itchy eyes, headaches, insomnia, depression, anxiety, and more.
4. When Your Personal Life is Affected
Apart from your professional life, you also have a personal life that requires equal attention. So, if you’re not taking care of yourself, not spending enough time with your friends and family, not having any hobbies, or not working out, then you’ve lost your work/life balance.
5. When Your Performance is Jeopardized
It is natural that you lose focus and can’t concentrate on work after you’ve exploited yourself for too long. The human brain also gets tired and needs some downtime. When you’re constantly working without properly resting, you stop performing at your best, which further leads to frustration and anger.
6. When Pending Work Starts Piling Up
When the work is done under too much pressure, it yields poor results. Your pace slows down, which leads to more pending work. When the pending work starts piling up, you need to work extra hours the next day and the day after. This is a vicious cycle that is difficult to break out of.
Can An Employer Limit Overtime Hours?
Employers can decide if they want to allow this option and, if so, how much. On the other hand, employees can control overtime by the hour. The important thing for an employee who wants to work overtime is to ensure they are on the same page with their employer.
When companies schedule working hours for their employees, they almost always have an overtime option in mind. However, if an employer doesn’t allow overtime, they must be careful about how many hours they schedule for workers. Sometimes, an employer may even change a schedule mid-week to avoid unwanted overtime.
Can Overtime Pay Affect Employee’s Tax Bracket?
As an employee works overtime, their earnings are taxed just like the rest of their paycheck, with a slight difference. Overtime pay is taxed at a marginal tax rate, which is the total taxes paid on any extra income. While an employee pays more taxes on overtime income, they still end up with more money than they would if paid at their regular rate.
How much overtime an employee works will determine whether or not they qualify for a higher tax bracket. If they consistently work more hours, their total income will increase. The higher their income, the more likely they may pay more in state and federal taxes. But, given the average tax rate, they would have to work exceedingly long hours to move to a higher tax bracket from overtime pay alone.
Can You Be Forced to Work Overtime?
An employer has the right to make an employee work overtime without:
- asking them for their approval
- checking if they would like to work more hours
- letting them pick their overtime hours
- offering it only to employees who want to work more hours
- telling an employee that it’s okay to refuse to work overtime.
Employers can also fire an employee for refusing to work the mandated overtime. New York employers can also discipline, demote, or cut the working hours of employees who refuse to work the mandated extra hours. However, employers must not create a safety risk for employees during mandatory overtime.
Can You Refuse to Work Mandatory Overtime?
In most cases, employees cannot refuse to work overtime. Should they refuse, they may be subjected to discipline or get fired. However, there are some cases when firing an employee for refusing to work mandatory overtime is seen as illegal:
- When the overtime breaches a contract
- When overtime work creates a health or safety hazard
- When employees are not paid for their overtime work according to federal and state law
- family emergencies protected under the Family Medical Leave Act (FMLA).
What are the Mandatory Overtime Exemptions?
Some exemptions regulate or prohibit mandatory overtime. These are when:
- Employees work for a company that is not engaged in interstate commerce
- Exempt employees are not mandated to work overtime by federal law but have state laws that regulate overtime
- Employers with employees protected by the Americans With Disabilities Act (ADA) are required to modify their employee’s scheduled mandatory overtime to reasonably accommodate their disability.
Can You Negotiate Mandatory Overtime?
Highly valued workers may be able to negotiate the terms with their employer to avoid or schedule working overtime. Consider talking with your employer about your options in a confidential setting and mention all your concerns, like family obligations, child care, prior commitments, extracurricular activities, or health concerns that might make it difficult for you to work overtime. Depending on your situation, you might be able to come to a solution that works for both of you.
Pay for Mandatory Overtime
To be qualified for overtime pay, a person must be a non-exempt employee, meaning they are entitled to minimum wage and overtime pay if they work more than 40 hours in a work week. Non-exempt employees are typically paid by the hour or earn a wage that is less than a minimum determined by the Department of Labor. Non-exempt employees are, among others, contractors, servers, freelancers, and retail associates.
There are a couple of exceptions to the Fair Labor Standards Act (FLSA), where employees are not paid for their mandatory overtime work. Some examples are:
- Sales workers who work on commission
- Seasonal or recreational workers
- Computer professionals who make a minimum of $27.60 per hour
- Mechanics and service members at car dealerships
- Drivers
- Farm workers
- Administrative, professional, executive, and outside sales employees who are paid a salary.
Another exception where the FLSA law may not apply is for employees working under a union contract or another type of employment contract. In such a case, the employer must comply with the terms of the collective bargaining agreement. If the employer fails to adhere to the terms of the agreement regarding mandatory overtime, they will breach the contract, which can subject th
em to a civil lawsuit.
Conclusion
If you have been working mandatory overtime and you’ve not been adequately compensated for your work, there are several steps you can take to mend the situation and ensure that you receive the overtime pay that is due to you.
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.