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Mansell Law, LLC Experienced Employment Lawyers

NYC Overtime Lawyer

What are the Overtime Laws in New York and should you be paid overtime even if your employer calls you salaried employee?

Both federal law (Fair Labor Standards Act (FLSA)) and New York State Labor Law generally require that employees are paid a minimum wage and overtime at a rate of 1½ times their regular rate of pay for all hours worked over 40 in a single workweek. The FLSA sets the “floor” for how employers may pay employees and states may choose to raise minimum wage or overtime requirements. However, certain salaried employees are exempt from federal and state overtime pay requirements. In New York, some employees are exempt from overtime under the federal FLSA, but are still entitled to overtime under the New York State Labor Law. While these employees must be paid overtime, New York State Labor Law requires an overtime rate of 1½ times the state minimum wage for their overtime hours, regardless of the amount of their regular rate of pay.

Which Employees are Exempt from FLSA and New York State Overtime Law?

The FLSA and New York State Labor Law provide an exemption from both minimum wage and overtime pay for employees who hold positions that are characteristically “white collar,” or who are employed as bona fide executive, administrative, professional, and outside sales employees. In order for an employer to claim that its employees are exempt from the overtime pay requirements of the FLSA it must prove, among other requirements, that employee pay meets the “salary basis test.” To satisfy this test, employees must be paid on a salary basis at not less than $684 per week or $35,568.00 per year for full-time employees.

Employees working in certain occupations are exempt from both FLSA and New York State Labor Law minimum wage and overtime provisions. These include:

  • Individuals Working for a Federal, State, or Municipal Government
  • Farm Laborers
  • Certain Volunteers, Interns and Apprentices
  • Taxicab drivers
  • Members of Religious Orders
  • Certain Individuals Working for Religious or Charities
  • Camp Counselors
  • Individuals Working for a Fraternity, Sorority, Student or Faculty Association
  • Part-time Baby Sitters

Salary Minimum Thresholds for New York Overtime Pay Exemptions

In 2016, the New York State Legislature chose to increase the minimum salary threshold under the salary basis test higher than the minimum required under the FLSA. However, the New York State salary threshold increases were incremental and varied based on where the employer was located.

Now, New York City employers must pay their exempt employees a salary at not less than $1,125 per week or $58,500 per year for full-time employees. If you work in New York City but make less than $1,125 per week and are classified as an exempt employee, give us a call, because you may be owed overtime wages.

Employers in in Nassau, Suffolk and Westchester counties must currently pay their exempt employees a weekly salary of at least $1,050 or $54,600 per year for full time employees. This threshold will increase on December 31, 2021, to $1,125, matching the minimum salary threshold in New York City.

Employers everywhere else in New York must pay their exempt employees a weekly salary of at least $937.50 or $48,750 per year for full time employees.

Bonus and Incentive Payments for Salary Employees

In 2020, the Department of Labor instituted a change in how employees’ weekly salary amounts are calculated for purposes of the salary basis test discussed above. If the employee is paid non‑discretionary bonuses or other incentive pay, such as commissions, at least once per year, then the employer can count those payments towards the employee’s weekly salary to determine whether the salary meets the minimum salary threshold under the salary basis test.

However, there is an important limit to this new rule—employers may only use employee bonuses and incentive payments to account for a maximum of 10% of the threshold salary level. Thus, employers in New York City can only use employee bonuses and incentive payments to account for a maximum of $112.50 per week (10% of the $1,125.00 salary threshold). For example, if an employee makes $950 per week, and then she makes an additional $2,000 that week on commission, she earns a total salary of $2,950 that week. However, only $112.50 of her $2,000 commissions earned is counted towards her weekly salary for purposes of the salary basis test. Thus, while the employee’s actual weekly income far surpasses the $1,125.00 per week threshold, only a total of $1,062.50 counts towards her weekly income for purposes of the salary basis test, so this employee would NOT be exempt from overtime pay during this workweek.

If you believe you are owed overtime pay, or if you have other questions about New York Overtime Laws or employment, please reach out to Mansell Law for a free consultation.

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