Compliance Watch:

What are my rights as a salaried employee in New Mexico?

Salaried employment refers to an employment agreement in which the employee receives a fixed compensation at the end of every pay period. Salaried employees in New Mexico earn a predetermined amount in U.S. currency which is paid in cash, with checks that are redeemable in full value, or direct deposits. 

Salaried employees who meet the criteria for exemption as outlined by the Federal Labor Standards Act (FLSA) should receive their salaries at least once in a calendar month while other salaried employees in the state should be paid every 16 days. The employees should receive their salaries for time worked in the first half of the month by the 25th day of the month while salaries for time worked in the second half of the month should be paid out by the 5th day of the following month. 

Salaried employment in New Mexico is classified into two based on the applicability of overtime and minimum wage laws to each category. Employees in the first category are exempt from state and federal overtime and minimum wage laws while the second category comprises non-exempt employees, who are subject to state wage and hour laws.

Please note that New Mexico labor laws, and labor laws in general, are dynamic and can change over time. Therefore, it’s important to consult legal resources such as employment attorneys, contact the New Mexico Department of Workforce Solutions, and review the specific policies of your employer to better understand the distinctions between salaried and hourly employees in New Mexico.

Employees in New Mexico are entitled to the following fundamental rights to ensure safe,  fair and just working conditions:

• Minimum Wage: Salaried employees in New Mexico have the right to receive at least the minimum wage as compensation. The minimum wage in the state is $12 per hour for non-exempt salaried employees and $3 for tipped employees. 
• Minimum Salary Threshold: Certain employees, who meet the federal criteria for exemption, are entitled to a minimum annual compensation of $35,568 per year ($684 per week). 
• Overtime Pay: As per New Mexico overtime laws, non-exempt salaried employees in the state are entitled to overtime pay for all time worked beyond 40 hours in a workweek. 
• Anti-Discrimination: Employers in New Mexico are prohibited from terminating employees or refusing to hire, promote, or compensate employees equally based on race, age, religion, color, national origin, ancestry, sex, physical or mental handicap or serious medical condition, sexual orientation, and gender identity. 
• Sick Leave: Salaried employees in New Mexico are entitled to paid sick leave of up to 64 days in 12 months. Employees accrue the leave at a rate of 1 hour of paid sick leave for every 30 hours of work starting on their first day of work in the company. For computing paid sick leave in the state, exempt employees are considered to work 40 hours in every workweek. 
• Family and Medical Leave: Exempt employees in the state have the right to take up to 12 weeks of unpaid, job-protected leave for certain family or medical reasons as provided by the Family and Medical Leave Act (FMLA).

Yes, while exempt employees are not eligible for overtime, compensation by salary basis does not excuse all salaried employees from accruing compensation at a premium rate for time worked over 40 hours in a workweek. Overtime pay applies to non-exempt salaried employees in the state with a few exceptions, including farm and agricultural workers as well as part-time cotton ginning workers.

Employers in New Mexico are allowed to make two categories of deductions from their employees’ salaries. First, they can make any deductions that are required or authorized by federal or state laws or courts of law. These include taxes and court-ordered wage assignments such as spousal and child support. 

Second, employers are allowed to make voluntary deductions. These include deductions for employees’ contributions to health, insurance, and savings plans. Please note that these deductions have to be voluntary and require explicit authorization from the employees. Other deductions that fall under voluntary deductions include deductions to cover cash shortages, property damage, breakage, or losses, and uniforms or equipment required to do their jobs. Employers cannot make these deductions without written consent from their employees.

Legally, employers in New Mexico are not required to provide rest or meal breaks for their salaried employees. However, if an employer offers breaks to employees, all breaks of up to 30 minutes are considered compensable time while breaks of more than 30 minutes can be unpaid for non-exempt salaried employees. 

While employers are not required to offer breaks to employees in the state, they are required to provide paid sick leave. Salaried employees in the state are entitled to paid sick leave of up to 64 days in 12 months. Employees accrue the leave at a rate of 1 hour of paid sick leave for every 30 hours of work starting on their first day of work in the company. Exempt employees are considered to work 40 hours in every workweek to compute accrued sick leave.

A flexible work arrangement is any work schedule that deviates from the standard 8-hour workdays and 40-hour workweeks. New Mexico laws do not require employers to offer alternative work schedules. Rather, the state leaves the decision to offer flexible schedules and the structure of the schedules to private agreements between employers and employees. However, the state encourages private employers to embrace alternative work arrangements and leads by example by allowing state employees to choose different work arrangements if their duties allow. 

Common flexible work arrangements in New Mexico state agencies include flex schedules and condensed work weeks. Flex schedules allow employees to work outside the traditional work hours every workday. Comparatively, different variations of condensed schedules such as the compressed schedules allow employees to modify their daily hours as long as they put in 40 hours in a workweek for non-exempt employees or 80 hours in a pay period for exempt employees.

New Mexico labor laws recognize the federal criteria for exemption from overtime and minimum wage laws. Therefore, exempt status in the state refers to ineligibility for overtime pay for work done more than 40 hours in a workweek for exempt employees working the standard schedule or 80 hours in two workweeks for exempt employees who work alternative schedules. The definitive features of exempt employees with exempt status include:

• Compensation on a salary basis.
• A minimum salary of $684 per week or $35,568 per year.
• Specific primary job duties that fall under professional, executive, administrative, and select sales roles.

Employee exempt status is typically associated with salaried employees who meet specific criteria. It has the following implications for employees: 

• Basis of Compensation: Exempt employees are paid a fixed predetermined salary regardless of the quality and quantity of their work and the number of hours they work in a week. This may lead to longer working hours without additional compensation.
• Job Autonomy: Exempt employees typically exercise discretion and independent judgment in their duties and can have more control over their work schedules. 
• Eligibility for Overtime: Exempt employees are not entitled to overtime pay for time worked beyond 40 hours in a workweek. Therefore, they may be required to work longer hours without additional compensation.
• Eligibility for Certain Benefits: Exempt employees have access to relatively more benefits compared to non-exempt employees. 

Exempt status has the following implications for employers: 

• Compensation Structure: Exempt employees earn a fixed salary, which can lead to predictable labor costs and make running payroll easier. 
• Legal Compliance: Employers must ensure that exempt employees meet the FLSA criteria. Otherwise, they risk facing legal and financial consequences for employee misclassification.
• Job Flexibility: Exempt employees may request more flexibility in terms of their schedules, which may require employers to provide accommodations for employees working alternative schedules. 
• Reduced Overtime Costs: Exempt employees are not eligible for overtime pay. Therefore, employers can reduce their labor costs and meet fluctuations in labor demand efficiently by relying on their exempt employees.

In New Mexico, employee classification as exempt is primarily determined by federal law. Employers in the state use the following tests, which are based on the FLSA criteria for exemption, to determine whether an employee is exempt:

1. Salary Basis Test: All exempt employees must be compensated on a salary basis. They earn a predetermined and fixed salary at the end of every pay period. The salary is not subject to deductions based on the quality or quantity of work done or the number of hours worked. 
2. Salary Level Test: An exempt employee’s salary must meet or exceed the minimum threshold as defined by the FLSA. The current salary threshold for exempt employees in New Mexico is $684 per week or $35,568 per year. 
3. Duties Test: The FLSA establishes specific categories of exemptions. An employee who meets the salary level and basis criteria should fall under one of the following categories of employees to qualify as exempt:
   • Executive Employees: Executive or managerial employees whose primary duties involve managing a company or department in a company, supervising more than one employee regularly, and weighing in on significant personnel decisions is considered exempt if they pass the salary level and basis tests.
   • Administrative Employees: Employees in administrative roles who are primarily involved in office or non-manual work related to the management of their employer’s business and exercise independent judgment in their duties are considered exempt if they earn a salary of $684 or more in a workweek. 
   • Professional Employees: Doctors, teachers, architects, and other professionals who meet the salary level and basis criteria are considered exempt if their primary duty requires advanced knowledge in a field of science or learning and is predominantly intellectual.

It’s crucial to note that while New Mexico upholds executive, administrative, and professional exemptions, it does not exempt computer employees such as systems analysts or outside salespeople from overtime even when they meet the salary basis and level criteria.

Non-exempt salaried employees in Mexico have the right to a minimum wage of $12 per hour for regular hours and $18 per hour for time worked above 40 hours in a workweek. Tipped workers are entitled to a minimum wage of $3. However, the minimum wage rate is not constant all over New Mexico. Certain counties can have a higher local rate. These include:

• Santa Fe County: Non-exempt salaried employees are entitled to a minimum wage of $14.60 per hour. whereas tipped employees should receive $4.38 per hour.
• Albuquerque County: Non-exempt employees have the right to receive $12.00 per hour. Tipped employees are entitled to $7.20 per hour.
• Las Cruces: Non-exempt employees are entitled to $12.36 per hour and tipped employees have the right to be paid $4.95 per hour.

 Comparatively, non-exempt employees are not bound by the state’s minimum wage laws. They are entitled to a minimum compensation of $684 per week ($35,568 per year).

Eligible salaried employees in New Mexico earn overtime pay at a rate of 1.5 times their regular pay. Employees of state agencies are allowed to choose between compensatory time and monetary compensation for overtime. Comp time is compensated at the same rate as overtime pay.

Employers in New Mexico are allowed to make two categories of deductions from their employees’ salaries as follows:

• Mandatory Deductions: Employers can make any deductions that are required or authorized by federal or state laws or courts of law. These include taxes and court-ordered wage assignments such as spousal and child support. 
• Voluntary Deductions: Employers in the state are allowed to make voluntary deductions. These include deductions for employees’ contributions to health, insurance, and savings plans. Please note that these deductions have to be voluntary and require explicit authorization from the employees. Other deductions that fall under voluntary deductions include deductions to cover cash shortages, property damage, breakage, or losses, and uniforms or equipment required to do their jobs. Employers cannot make these deductions without written consent from their employees.

New Mexico labor laws provide various protections and benefits for employees in the state. Key protections and benefits include: 

• Minimum Wage: Employees in New Mexico are entitled to a minimum wage rate of $12 per hour, which is higher than the federal minimum wage.
• Overtime Pay: Non-exempt employees in the state are entitled to overtime pay at a rate of 1.5 times their regular wage for each hour worked beyond 40 hours in a workweek.
• Sick Leave: State labor laws require employers in New Mexico to provide paid sick leave of up to 64 days in 12 months. 
• Family and Medical Leave: Exempt employees in the state have the right to take up to 12 weeks of unpaid, job-protected leave for certain family or medical reasons as provided by the (FMLA).
• Workplace Safety: Employees in New Mexico have the right to a safe and healthy working environment. In addition to providing a safe and healthy work environment, the state requires employers to provide workers’ compensation to employees who sustain injuries and illnesses on the job. It’s important to note that the benefits of workers’ compensation insurance, which include medical care, survivor benefits paid to an employee’s next-of-kin in fatal cases, and wage replacement are no-fault benefits. Therefore, they are owed to employees who get injured or fall ill on the job even when the injuries and illness are the result of negligence. 
• Discrimination and Harassment: New Mexico laws prohibit discrimination and harassment based on race, age, religion, color, national origin, ancestry, sex, physical or mental handicap or serious medical condition, sexual orientation, and gender identity. Employers in the state bear the responsibility of providing a workplace that is free from discrimination and harassment.

Labor law violations can encompass a wide range of issues, including minimum wage and overtime violations, employee misclassification, failure to pay for all hours worked, withholding earned wages, retaliation and wrongful termination, and discriminating against employees based on protected characteristics.

The New Mexico Department of Workforce Solutions handles all wage and hour claims. Further, you can report health and safety violations to the New Mexico Environment Department by filling out the OSHA online complaint form.