Updated: May 25, 2021
The New York Minimum Wage Act, implemented on December 31, 2018, required that all employees working in the state receive at least $11.10 an hour. This minimum wage increase has affected overtime rates, depending on various unique provisions based on where a business operates and how many people it employs.
The Act placed New Yorkers above the federal minimum wage of $7.25, but $11.10 was only the pay floor in some areas, not all of them. Long Island and Westchester workers were due $12 an hour in 2019, while New York City’s small employers (10 employees or less) should have paid staff $13.50 an hour and larger employers (11 employees or more) $15.
That last figure remained unchanged after December 31, 2019, but there were further minimum wage increases for 2020. The NYC small employer minimum wage was raised to $15 an hour, Long Island and Westchester to $14, and the remaining areas to $12.50. By the end of 2021, Long Island and Westchester’s minimum wage will increase to $15, with the rest of the state continuing to escalate the rate annually until the minimum wage is $15 state-wide.
Now that we know what’s ahead for basic pay, let’s look at how much overtime will cost and how it will be enforced.
New York calculates overtime using the time-and-a-half system. Unless otherwise exempt, employees receive an overtime rate of one-and-a-half times their regular rate of pay for all hours worked in excess of a 40-hour workweek.
By way of example, based on an $11.10 pay floor, time-and-a-half sets hourly overtime at $16.65. As we highlighted above, there’s no universal figure for overtime pay. The number of employees at a workplace, their role performed, and the organization’s exact location in the state will dictate the final hourly number.
The Fair Labor Standards Act (FLSA) defines a 40-hour workweek as any seven consecutive workdays. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest unless overtime is worked on these days.
New York labor law also requires certain employers to give their staff at least 24 hours of consecutive rest in any calendar week. Under Section 161 of the New York State Labor Law employers who operate a restaurant, hotel, factory, or mercantile establishment are a few examples subject to this rule.
Understanding how a workweek is defined is essential to understanding overtime. It’s defined as seven consecutive 24-hour periods, or a fixed and regularly recurring period of 168 hours. Workweeks don’t have to coincide with calendar weeks and may begin at any hour on any day. It’s standard practice to pay any overtime earned in a workweek on the regular day for the pay period.
While employers can set the definition of a workweek at their discretion, they must do so with the intent to make it a fixed and regular measurement. Any attempt to alter the definition to avoid payment of due overtime is against the law.
The standard 40-hour week becomes 44 hours for New Yorkers classed as live-in or domestic workers. Domestic workers are those who work in their employer’s home, performing duties such as cooking, child or elder care, or property maintenance (although babysitters are exempt from overtime law).
The Department of Labor provides expanded definitions that address occasional domestic duties and all related rights for both resident and non-resident employees. Hotel and restaurant employees, building-services workers and non-profit employees are also subject to special overtime rules.
Taxi drivers, college students, farmworkers, salespeople, and camp counselors are all exempt from overtime law. As examples, the Executive Exemption applies to those who manage their place of work, a department of it, or two or more employees and exercise discretionary powers. The Administrative Exemption applies to employees whose primary duties are related to general operations or who regularly assist an executive-level employee.
The list of further exemptions is extensive and be accessed via the Employment Law Handbook.
Employees earning less than $35,308 a year and who don’t work in any of the exempt roles mentioned above are typically eligible for overtime. Workers who receive a salary and usually work in excess of 40 hours a week are usually eligible (depending on their duties and if they meet the salary threshold), and a Department of Labor ruling in September 2019 added 1.3 million new eligible workers in a move due to become effective on January 1, 2020.
Some jobs are covered for overtime at the federal level. In cases where an employee is subject to both the state and federal minimum wage laws, they’re entitled to whichever is higher. These federally covered roles include firefighters, paramedics, and police.
Nurses and paralegals are also covered due to their often-long hours of work, and it is prohibited to mandate overtime for nurses who are protected under Section 167 of the Labor Law. The Department of Labor offers e-tools that provide further help and advice about overtime for both employers and employees.
If you are an employee and you feel that your employer has committed a wage & hour violation, please reach out to an experienced employment attorney.