When calculating overtime pay in New York, it is important to understand how the state’s laws align with and differ from federal regulations. New York’s approach to overtime pay is designed to ensure that employees are fairly compensated for the extra hours they work beyond their regular schedule. The state has specific guidelines that detail who qualifies for overtime and how it is calculated. Understanding these principles is crucial for employers and employees to ensure compliance with wage and hour laws.

This article provides an overview of how overtime pay is calculated in New York.

**This Article Covers**

**Understanding Overtime in New York**

- Which Overtime Laws Apply in New York?
- How Much is Overtime Pay in New York?
- Who is Eligible for Overtime Pay in New York?
- Who is Exempt from Overtime Pay in New York?
- What is the Regular Rate of Pay in New York?

**Overtime for Hourly and Salaried Employees in New York**

- How do you Calculate Overtime for Hourly Employees in New York?
- How is Overtime Calculated for Salaried Employees in New York?

**Overtime for Complex Pay Structures in New York**

- How do you Calculate Overtime for Tipped Employees in New York?
- How do you Calculate Overtime for Commission Employees in New York?
- How do you Calculate Overtime for Piece Rates in New York?

**Additional Considerations for New York Overtime**

- What is the “Spread of Hours” Rule in New York?
- What is the Statute of Limitations for Claiming Unpaid Overtime in New York?
- What are the Recordkeeping Requirements for Overtime Wage Compliance in New York?

**Understanding Overtime in New York**

**Which Overtime Laws Apply in New York?**

Both the New York State Labor Laws and the federal Fair Labor Standards Act (FLSA) govern overtime in New York. While both laws generally align, employers must adhere to the regulation that is more favorable to the employee.

Under the FLSA:

- Employees are entitled to overtime pay for any hours worked over 40 in a single workweek unless they are classified as exempt.
- Overtime pay must be calculated at one and a half times the regular hourly rate.
- There is no requirement for overtime pay for work on weekends, nights, or holidays unless these are overtime hours.
- There are no federal restrictions on the number of hours an employee can work in a week, but overtime is based on a weekly cycle, which consists of seven consecutive 24-hour periods. This workweek does not have to align with the calendar week and can start on any day.
- Employers cannot average working hours over multiple workweeks to determine overtime eligibility.

Under New York Labor Laws:

- Certain domestic or live-in workers only begin to receive overtime pay for hours worked beyond 44 in a workweek.
- Nurses are restricted from working beyond their scheduled hours except in specific situations such as healthcare disasters, unforeseen emergencies, or state/county emergency declarations.
- State overtime requirements do not apply to federal, state, and local government employers but do apply to charter schools, private schools, not-for-profit organizations, and non-teachers in school districts.
- New York has introduced a “spread of hours” rule requiring non-exempt employees to receive an additional hour of pay at the minimum wage rate if their workday exceeds ten hours, including all work hours and breaks or off-duty time within the period.

**How Much is Overtime Pay in New York?**

Overtime pay in New York is calculated at one and a half times the employee’s regular rate of pay for any hours worked beyond 40 in a workweek.

If an employee’s regular rate of pay is $16, their overtime rate would be $24. For any hours worked beyond 40 in a workweek, the employee should receive $24 per additional hour.

To learn more, check out our guide on New York Overtime Laws.

**Who is Eligible for Overtime Pay in New York?**

In New York, most non-exempt employees are eligible for overtime pay under both state and federal FLSA. Employees are entitled to overtime pay if they work more than 40 hours in a workweek, regardless of whether they are paid hourly, on a salary, or through another compensation method, unless they fall under specific exemptions.

Check out our guide on Overtime Rights in New York.

**Who is Exempt from Overtime Pay in New York?**

Certain categories of employees in New York are exempt from overtime pay under state and federal laws. Under federal regulations, employees may be exempt from overtime if they hold executive, administrative, or professional positions. However, having a specific job title alone does not guarantee exemption. Employees must meet certain criteria assessed through three tests:

**Salary Basis Test:**Exempt employees must receive a fixed salary, independent of their work hours, indicating they are salaried rather than hourly workers.**Salary Test:**Exempt employees must earn a salary above a set threshold. In New York for 2024, this threshold is $1,200 per week in New York City, Long Island, and Westchester, or $1,124.20 elsewhere in the state.**Duties Test:**Employees must primarily perform administrative, professional, or executive tasks and use discretion and independent judgment in their roles.

Exemptions of specific occupations at both federal and state levels include:

- Outside salespeople
- Farm laborers
- Certain volunteers, interns, and apprentices
- Taxi drivers
- Members of religious orders
- Camp counselors
- Part-time babysitters
- Federal, state, or municipal government employees
- Employees at specific religious or charitable organizations

**What is the Regular Rate of Pay in New York?**

The regular rate of pay is the hourly rate that an employee earns for non-overtime work. It is used to calculate overtime pay. Determining the regular rate of pay in New York depends on the type of employee:

- For hourly employees, the regular rate of pay is simply their hourly wage.
- For non-exempt salaried employees, the regular rate of pay is calculated by dividing the weekly salary by the number of hours the salary is intended to cover.
- For piece rate or commission-based employees, the regular rate of pay is calculated by dividing the total compensation by the total number of hours worked.

**Overtime for Hourly and Salaried Employees in New York**

**How do you Calculate Overtime for Hourly Employees in New York?**

Overtime for hourly employees in New York is calculated at a rate of 1.5 times the employee’s regular hourly rate for all hours worked over 40 in a workweek. To calculate overtime, the employer must:

- Determine the employee’s regular hourly rate.
- Calculate the overtime rate by multiplying the regular hourly rate by 1.5.
- Determine the number of overtime hours worked. Any hours beyond 40 in a workweek are considered overtime hours.
- Calculate the overtime pay by multiplying the overtime rate by the overtime hours.

For example, if an employee is paid $20 per hour, the overtime rate would be $30 ($20 x 1.5). The employee works 50 hours in a workweek, which means the employee worked ten overtime hours. For the ten overtime hours, the employee is entitled to an overtime pay of $300 ($30 x 10).

Read our guide on Your Rights as an Hourly Employee in New York to learn more.

**How is Overtime Calculated for Salaried Employees in New York?**

Salaried employees not exempt from overtime must receive overtime pay for hours over 40 in a workweek. To calculate the overtime for non-exempt salaried employees in New York, employers must:

- Determine the employee’s regular hourly rate by dividing the employee’s weekly salary by 40 hours.
- Calculate the overtime rate by multiplying the employee’s regular hourly rate by 1.5.
- Determine the employee’s overtime hours. Any hours worked beyond 40 in a workweek are considered overtime.
- Multiply the overtime rate by the number of overtime hours worked.

For example, if an employee earns a weekly salary of $800, the employee’s regular hourly rate is $20 per hour ($800 / 40). The overtime rate of the $20 hourly rate is $30 ($20 x 1.5). If the employee worked 48 hours a week, the overtime hours are eight. For eight hours of overtime, the employee is entitled to an overtime compensation of $240 ($30 x 8).

Check out our guide on Your Rights as a Salaried Employee in New York.

**Overtime for Complex Pay Structures in New York**

**How do you Calculate Overtime for Tipped Employees in New York?**

Tipped employees in New York must receive at least the state minimum wage when their tips and wages are combined. For calculating overtime:

- Determine the employee’s regular hourly rate by adding the tipped wages and tips received during a workweek. If the total equals or exceeds the minimum wage, the tipped wage is used as the regular rate.
- Calculate the overtime rate by multiplying the 1.5.
- Determine the number of overtime hours the employee worked. Any hours worked beyond 40 in a workweek are considered overtime.
- Calculate the overtime pay by multiplying the overtime rate and overtime hours.

If a server’s regular hourly rate is $15 (after combining tips and wages), the overtime rate would be $22.5 per hour. If the server worked 50 hours in a week, then the overtime hours are 10. For the ten overtime hours, the server receives an overtime pay of $225.

### How do you Calculate Overtime for Commission Employees in New York?

Commission-based employees in New York are also entitled to overtime pay. To calculate:

- Determine the regular hourly rate by dividing the total weekly earnings (including commissions) by the total hours worked.
- Divide the weekly compensation by the total number of hours worked in the week.
- Calculate the overtime rate by multiplying the regular hourly rate by 1.5.
- Determine the overtime hours worked by the employee. Any hours worked beyond 40 are considered overtime hours.
- Calculate the overtime pay by multiplying the overtime rate by the overtime hours.

If a salesperson earns a base pay of $700 and a commission of $100 for 40 hours of work, their total weekly earnings is $800 ($700 + $100). The regular hourly rate is $20 ($800 / 40) and the overtime rate would be $30 ($20 x 1.5).

### How do you Calculate Overtime for Piece Rates in New York?

Piece rate employees are paid based on the number of units they produce rather than hourly wages. To calculate overtime pay:

- Identify how much the employee is paid per unit of work completed.
- Multiply the number of units completed by the piece rate to find the employee’s weekly earnings.
- Calculate the employee’s regular hourly rate by dividing the total earnings by the total number of hours worked in the workweek.
- Determine the overtime rate by multiplying the regular hourly rate by 1.5.
- Determine the employee’s overtime hours. All hours worked beyond 40 in a workweek are considered overtime.
- Calculate the overtime pay by multiplying the number of overtime hours by the overtime rate.

If a worker earns $800 for producing 50 units in 40 hours, the regular hourly rate is $20 ($800 / 40). The overtime rate would be $30 per hour.

**Additional Considerations for New York Overtime**

### What is the “Spread of Hours” Rule in New York?

The “Spread of Hours” rule in New York (N.Y. Comp. Codes R. & Regs. Tit. 12 § 146-1.6) refers to the total duration from the beginning to the end of an employee’s workday, including working hours, meal breaks, and any off-duty time between shifts. This rule is a regulation that applies primarily to employees in certain industries, such as hospitality (e.g., restaurants and all-year hotels). The “Spread of hours” rule requires that an employee be compensated with additional pay if the spread of hours exceeds 10 hours in a single workday. The employee is entitled to one additional hour of pay at the New York State minimum wage rate, even if the employee’s regular hourly rate is higher than the minimum wage. The additional hour of pay due to the spread of hours rule is not considered payment for actual work performed. Therefore, it does not need to be included when calculating the employee’s regular rate for overtime purposes.

For example, an employee works from 8 a.m. to 12 p.m. and then from 6 p.m. to 9 p.m. In this case, the total work time is seven hours, but the spread of hours is 13 hours. Since the spread of hours exceeds 10, the employee is entitled to one additional hour of pay at the basic minimum hourly wage rate, even though the total work time is only 7 hours.

**What is the Statute of Limitations for Claiming Unpaid Overtime in New York?**

The statute of limitations in New York for claiming unpaid overtime wages, according to NY Lab L § 198.3, is generally six years. This means that employees can file a claim for unpaid overtime wages for work performed within six years before filing the claim. The statute of limitations is longer in New York than the federal statute of limitations, which typically has a two-year statute of limitations that can be extended to three years for willful violations.

**What are the Recordkeeping Requirements for Overtime Wage Compliance in New York?**

New York employers must maintain accurate records of employee-related information to comply with overtime wage laws. According to the recordkeeping requirements under the FLSA, these records must include:

- Employee’s full name and address.
- Social security number or employee identification number.
- Daily and weekly hours worked by each employee.
- Regular hourly rate of pay and overtime rate of pay.
- Wages paid each pay period, including straight time, overtime, and other payments.
- Deductions from wages.
- Dates of workweeks and pay periods.
- Any written agreements with employees regarding wage payments (e.g., tip credits or meal credits).

In addition, employers can use various timekeeping methods, such as written records, time clock software, or time and attendance systems, that record wholly and accurately. Employers must retain these records for **six years**, which aligns with New York’s statute of limitations for wage claims.

**Learn more about New York Labor Laws through our detailed guide.**

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