New York employers need to fully understand the requirements regarding New York overtime, in order to avoid legal and financial penalties.
Under New York Labor Law, employers must not only manage compliance under the Fair Labor Standards Act (FLSA), but the New York Minimum Wage Order as well.
According to New York Overtime Law, employers must typically pay employees 1.5 times their regular rate of pay for all timed worked over 40 hours in a work week. Some residential employees must receive overtime pay at the rate of 1.5 times their regular rate of pay for all time worked over 44 hours in a work week.
If an employee’s rate of pay differs at times, then employers must use the average pay rate as the regular rate of pay.
While some occupations are exempt from overtime requirements under the FLSA, New York overtime may require otherwise.
Employers struggling with controlling overtime costs may want to think about better employee scheduling techniques using an employee scheduler tool.
Employees in New York who are covered under the state or federal overtime requirements are typically entitled to 1.5 times their regular rate of pay for all hours worked over 40.
Example:
40 Regular Rate Hours
X $10 Per Hour Regular Rate
$400
$10 Per Hour Regular rate
+ 1 ½ Overtime Premium
$15.00 Per Hour Overtime Rate
10 Overtime hours
X $15.00
$150
$400 Regular Rate Time or "Straight Time"
+ 150 Overtime
$550 Total Pay
An employee’s regular rate of pay is their normal hourly wage. If an employee’s rate of pay differs at times, then use the average as the regular rate of pay.
Payments that are not part of an employee’s regular rate of pay include:
New York Overtime covers all individuals that fall under the definition of the word “employee”. An employee is defined as "any individual employed or permitted to work by an employer in any occupation”.
However, neither FLSA requirements or New York Overtime requirements apply to the following types of workers:
Important to note is while overtime requirements do not apply to individuals working for a Federal, State, or Municipal Government, the law does cover:
*It is also important to understand that employers may decide to pay overtime to exempt employees at their own discretion, with the exception of “elective officers and those officers otherwise excluded by law and to any or all public employees under their jurisdiction” under General Municipal Law 90.
Although executive, administrative, and professional employees are not covered by overtime requirements, some salaried employees are still entitled to overtime pay for hours worked over 40 hours. The number of hours included in the employee’s regular work week only affects the rate of overtime pay.
Example: An employee may be hired to work a 45-hour workweek (called “straight time”) for a weekly salary of $405. In this instance the regular rate is obtained by dividing the $405 straight-time salary by 45 hours, resulting in a regular hourly rate of $9.00. The employee’s overtime rate is then calculated as $13.50 per hour ($9.00 straight time hourly rate and $4.50 extra hourly pay) and the employee should get $13.50 for 5 hours a week.
Executive, administrative, and professional (EAP) employees are exempt from overtime requirements under New York Overtime law. In order to determine if an employee falls into one of these categories, they must meet a salary level test or one of the other exemption requirements below.
On April 23, 2024, the U.S. Department of Labor announced a final rule regarding new exempt salary thresholds for the standard salary level, and the highly compensated employee total annual compensation threshold.
New York salary threshold is actually higher than the new exempt salary thresholds for FLSA. In New York, to be considered except from overtime, an employee must make at least the following:
New York City and Nassau, Suffolk, and Westchester Counties
|
|
| Effective Date | Standard Salary Level |
| January 1st, 2024 | $1,200.00 per week ($62,400 per year) |
| January 1st, 2025 | $1,237.50 per week ($64,350 per year) |
| January 1st, 2026 | $1,275.00 per week ($66,300 per year) |
The Rest of New York State
|
|
| Effective Date | Standard Salary Level |
| January 1st, 2024 | $1,124.20 per week ($58,458.40 per year) |
| January 1st, 2025 | $1,161.65 per week ($60,405.80 per year) |
| January 1st, 2026 | $1,199.10 per week ($62,353.20 per year) |
To learn more about the FLSA, click to access the FLSA Guide here. And for more help on classifying employees under FLSA guidelines, click through to see this article.
In order to qualify for an executive exemption, an employee must pass the Salary Level Test as well as:
If an employee meets the previous three requirements as well as the Salary Level Test, then they are considered an Executive Exempt Employee and are not subject to FLSA minimum wage and overtime law.
In order to qualify for an administrative exemption, an employee must pass the Salary Level Test as well as:
If an employee meets the previous two requirements as well as the Salary Level Test, then they are considered an Administrative Exempt Employee and are not subject to FLSA minimum wage and overtime law.
In order to qualify for a professional exemption, an employee must pass the Salary Level Test as well as:
OR
If an employee meets one of the previous two requirements as well as the Salary Level Test, then they are considered a Professional Exempt Employee and are not subject to FLSA minimum wage and overtime law.
To learn more about processing payroll in New York or maintaining compliance with New York overtime requirements, contact a New York Payroll Company.
By leveraging experts for payroll outsourcing, companies can avoid non-compliance fines and potential hefty legal penalties.
Companies struggling with managing employee overtime may want to consider evaluating their timekeeping system, and start a search for time and attendance software.