In numerous industries, it is a common occurrence for employees to work beyond their regular hours, surpassing the standard workday or the typical 40-hour workweek. Employers have an obligation to comply with labor laws by adequately compensating these employees for the additional time they put in. It is also crucial to have a clear understanding of the eligibility criteria, consequences of non-compliance, and the appropriate rates of overtime compensation.
In the state of New York, if an employee works over 40 hours per week, they have the right to receive overtime pay at a rate of one and a half times their regular rate of pay under New York Labor Laws. The purpose of this guide is to address inquiries and provide relevant court cases specific to New York, presenting the necessary steps to ensure the fair execution and payment of overtime.
This article covers:
- New York Overtime Rates
- Counting Hours in a New York Workweek
- Overtime Entitlement in New York
- Overtime for Salaried Employees in New York
- Waving Overtime in New York
- Overtime Pay for Holidays in New York
- New York Live In Workers & Overtime
- Common Overtime Violations in New York and Repercussions
- Unpaid Overtime in New York and Statute of Limitations
- Overtime Exceptions and Exemptions in New York
- Legal Cases Relating to Overtime Compensation in New York
In New York, like most states in the US, non-exempt employees are entitled to overtime pay if they have worked more than 40 hours in a week.
This means that any hours worked beyond 40 will be compensated at a rate of 1.5 times the employee’s hourly wage.
Since the minimum wage in New York varies depending on the region and is as follows:
- New York City, Westchester, Suffolk, and Nassau = $16.00 per hour
- Remainder of New York State = $15.00 per hour
Then the overtime rate in New York is:
- New York City, Westchester, Suffolk, and Nassau = $24.00 per hour
- Remainder of New York State = $22.50 per hour
Employers are required to determine the workweek as a consistent schedule spanning seven consecutive days and 24 hours each day. The work week does not have to follow the traditional Sunday to Saturday pattern; it can start on any day and continue for the next seven days.
Hours worked beyond 40 hours in a workweek are eligible for overtime pay. Further, while some states have set limits on daily overtime, meaning that employees who work beyond a certain number of hours in a single day are entitled to overtime pay, New York does not have a specified daily overtime limit. As such, no specific overtime regulations apply based on working more than 8 hours in a single workday or exceeding 5 days in a week.
Different employees or groups of employees may have different workweeks assigned to them. For instance, a retail employer might establish a Saturday to Friday workweek for sales staff while managers may follow a Monday through Sunday schedule.
The overtime rate law does not apply to federal, state, or local government employers and employees.
On the other hand, it does cover non-profit organizations, private and charter schools, as well as teachers working in school districts.
For residential employees or those whose duties are related to the employer’s premises, to be eligible for overtime pay, they must work more than 44 hours a week.
The payment of overtime wages for working on holidays or at night is not mandated by New York labor laws, but employers are free to do so. In such cases, the standard overtime rules will apply.
It is crucial to keep in mind that only regular payments will be taken into account when calculating overtime compensation. This means that any premium payments, expenses, gifts, or true premiums (such as those for working on weekends or holidays) will not be included.
Some salaried employees can still receive overtime pay if they work more than 40 hours, despite the fact that executive, administrative, and professional employees are exempt from overtime requirements.
The number of hours considered as the regular workweek for an employee only affects the overtime pay rate.
For instance, let’s consider an employee who is hired to work for 45 hours per week at a regular salary of $405. In this case, the regular rate of pay is calculated by dividing the weekly salary of $405 by the 45 hours worked, resulting in an hourly rate of $9.00.
The overtime rate for this employee is then determined as $13.50 per hour ($9.00 as the straight-time hourly rate and an additional $4.50 as extra hourly pay). Consequently, the employee should receive $13.50 for the 5 additional hours worked beyond the regular 40-hour workweek.
Under New York labor law, it is not permissible for employers and employees to waive or forfeit the entitlement of non-exempt workers to receive overtime pay through any agreement.
Any attempt to deny workers their right to overtime pay through such an agreement is deemed illegal and unenforceable under the laws of New York.
In New York, employers are not obligated by law to provide additional compensation to employees for working on holidays or weekends, unless there is a specific provision in the individual employment contract stating otherwise.
Another exception is when the hours worked on the holiday or weekend result in the employee exceeding 40 hours of work in that particular week.
Previously in New York, live-in workers were eligible for overtime pay when they worked more than 44 hours in a payroll week. However, under new regulations, residential workers are now entitled to overtime pay for hours worked over 40 in a payroll week.
Consequently, the definition of overtime hours for all non-exempt workers has been adjusted to include any hours worked beyond 40 in a payroll week.
Mistakes in calculating overtime pay are widespread and go beyond employers refusing to provide overtime compensation or misunderstanding the regulations. Common ways in which overtime laws are violated include:
- Misclassifying workers as exempt from overtime requirements.
- Requiring employees to work off the clock or volunteer unpaid hours.
- Improperly implementing “comp” time instead of overtime pay.
- Failing to compensate employees for all hours worked.
- Treating employees as independent contractors to avoid overtime obligations.
Remedies in place when an employer has unlawfully withheld overtime pay are:
- Back pay, which includes unpaid overtime wages.
- Damages resulting from the failure to provide proper compensation.
- Coverage of attorney’s fees.
- Specific state civil penalties of up to $1,000.
- Potential Fair Labor Standards Act (FLSA) violation penalties of up to $10,000.
The duration of reaching a resolution or settlement after initiating a lawsuit to recover unpaid overtime in New York can vary depending on several factors.
While some cases are resolved relatively quickly, within a few months, more intricate cases often take 1-2 years or even longer.
It’s important to note that the majority of overtime cases filed in New York are typically resolved through the process before reaching a trial.
Regarding the timeframe for bringing a wage claim under New York labor law, the statute of limitations allows a period of 6 years to file a claim for unpaid overtime wages.
The overtime rate is subject to a mix of federal and state exceptions under New York state law. The comprehensive list of exemptions, known as Section 651, can be overwhelming to navigate.
The following is a list of some of the most notable exceptions and exemptions to the overtime rate in New York State:
- Executive, administrative, and Learned and creative professionals who earn at least $1,200 per week
- Outside sales professionals
- Farm laborers
- Volunteers, interns, and apprentices
- Taxicab drivers
- Employees of religious and charitable organizations
- Camp counselors
- Part-time babysitters
- Employees of student organizations (such as fraternities, sororities, and faculty associations)
- It is important to note that these exemptions are subject to change, so it is essential to regularly check for updates to the law.
It is crucial to mention that although overtime requirements do not extend to individuals employed by a Federal, State, or Municipal Government, the law does encompass the following:
- Charter schools
- Private schools
- Not-for-profit corporations
- Non-teaching staff members working for school districts
Below, we present law cases relating to fair overtime compensation for employees in New York:
1. NY Sergeants Do not Qualify for Overtime Exemption due to Respective Duties
In the Mullins, et al. v. City of New York case, a group of sergeants from the New York City Police Department (NYPD) filed a lawsuit claiming that they were denied overtime pay under the Fair Labor Standards Act (FLSA) from 2001 until the present.
Initially, the officers’ request for overtime pay was denied, as they were considered exempt from such compensation. However, upon appeal, the court determined that the New York Department of Labor‘s interpretation of its regulations, which supported the officers’ claim, was reasonable and in line with the FLSA regulations.
Applying this interpretation to the case, the court concluded that the sergeants’ main responsibilities did not qualify as “management” duties. This meant that the officers were not eligible for the “bona fide executive” exemption from the FLSA’s overtime pay requirements.
Consequently, the court overturned the district court’s ruling and sent the case back for further proceedings, instructing the district court to issue a judgment in favor of the sergeants.
Key lessons from this case:
- The case highlights the importance of interpreting regulations accurately and consistently. The court determined that the Department of Labor’s interpretation of its regulations regarding overtime pay was reasonable and entitled to deference.
- The case emphasizes the significance of correctly classifying job duties when determining eligibility for overtime pay exemptions.
- The case demonstrates that employees have the right to pursue legal action if they believe their overtime pay has been wrongly denied.
2. Company Suggests “outside sales” Exemption of Employee under the Fair Labor Standards Act
In the Heras v. Metro. Learning Inst. case, Sandra Heras worked as a recruiter for Metropolitan Learning Institute (MLI), a non-profit organization. Her job involved recruiting students for MLI by approaching individuals on the street and convincing them to enroll. Her work hours were typically from 9 a.m. to 6 p.m., but she often worked beyond that without receiving overtime pay.
In mid-April 2019, MLI started giving Heras a one-hour lunch break but continued to pay her as if she worked exactly 40 hours per week, even though she regularly worked more. Heras alleged that MLI intentionally misreported her hours to avoid paying overtime and did not provide wage statements or notices.
MLI argued that Heras’ role as a recruiter fell under the “outside sales” exemption of the Fair Labor Standards Act (FLSA) and sought to dismiss her FLSA overtime claim. However, the court denied their motion, and the case was referred.
Key lessons from this case:
- This case highlights the importance of accurately classifying employees under relevant labor laws in order to understand exemptions and entitlements.
- Employers must maintain and provide accurate and complete wage statements or wage notices to employees.
- Timely and transparent communication of employees’ wages, hours worked, and overtime pay is crucial for compliance and maintaining employee trust.
Learn more about New York Labor Laws through our detailed guide.
Important Cautionary Note
When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for use of this guide.