Overtime Laws in New York: Everything You Need to Know

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With all the things you need to keep on top of as a business owner, knowing the nuances of your state’s overtime laws can feel like a chore. Which is why the experts at actiTIME have made a post outlining everything you’ll ever need to know about overtime regulations in New York!

What Are the Overtime Laws in New York?

Overtime law can be based on a few different factors. The main one is the Fair Labor Standards Act (FLSA), a national piece of legislation passed in 1938 that applies nation-wide. But each state can add to the FLSA to reflect local diversity – New York has opted for a mix of local and national laws. Before getting to the nuances of how to be compliant with overtime regulations, it might be good to refresh your knowledge of how overtime works with our primer.

A measure called the workweek is used to calculate overtime hours in New York. According to the FLSA, a workweek is made of seven consecutive 24-hour days. These can start on any day of the week, and different positions in a company (programmers, teachers, HR officers) can have different workweek regimes, but once a workweek has been assigned it can’t be changed.

Once an employee has accumulated more than 40 hours in a single workweek, every additional hour is counted as overtime. These can’t be averaged out over weeks where a worker’s put in less time:

Yes
Week 1:
46 hours
Week 2:
34 hours
Total:
74 regular hours
+ 6 overtime hours
No
Week 1:
46 hours
Week 2:
34 hours
Total:
80 regular hours

While New York state does not, like in some other states, apply a daily hourly limit after which employees are entitled to overtime pay (usually 8 hours), there is an exception to the weekly limit for certain domestic workers. If domestic staff are considered ‘live-in,’ then they must work more than 44 hours in a workweek before beginning to accrue overtime hours.

Another exception is for residential care and hospital workers. If they arrange it with their employers in advance, they are able to work in a fortnight period (14 days) instead of 7-day workweeks. In this case, they must be paid for overtime hours worked over 80 hours in 14 days or 8 hours in one day – if there is a discrepancy between the two, then they will be paid according to the count that results in the most overtime hours. A single, 7-day workweek may look as follows:

Day 1:
14 hours
Day 2:
5 hours
Day 3:
8 hours
Day 4:
9 hours
Day 5:
7 hours
Total:
39 regular hours
+ 1 overtime hours

In this case, overtime can be counted in one of two ways:

By 40-hour workweek: 40 regular hours + 3 overtime hours.

By 8-hour workday: 36 regular hours + 7 overtime hours

Since counting overtime using workdays instead of workweeks generates more overtime pay, this is how overtime must be counted during that week.

Employees who work in resort hotels have an additional requirement when it comes to overtime. They must be paid at an overtime rate whenever they are on duty for the seventh day in a row.

In New York, there are two different ways to compensate for overtime:

  • Overtime rate: workers receive 1.5x their normal hourly pay rate for every overtime hour;
  • Compensatory time: workers can take 1.5 paid hours off for every hour of overtime worked.

All employees can choose to bank their compensatory time, but only until the banked time is under 240 hours.

How Do I Calculate Overtime Pay in New York?

Paying out overtime hours is more simple than it looks – the main thing is making sure that you know the base ray of pay depending on where your company is registered in New York State.

In New York City, as of December 31st, 2019, minimum wage was raised to $15.00 per hour (overtime rate: $22.50). In Suffolk, Nassau and Westchester counties, minimum wage is $13.00 an hour (overtime rate: $19.50). In the rest of the state, the minimum wage is $11.80 (overtime: $17.70). These rates change for fast food and tipped workers, and will be in effect until December 30th, 2020. Minimum wages will be increased annually across the state until every region will be paid out at a rate of at least $15.00.

Workers in New York City might have a monthly paycheck (before taxes) like this:

Week 1:
Week 2:
Week 3:
Week 4:
Regular hours:
Overtime hours:
Total:
40 hours (40 regular)
49 hours (40 regular + 9 overtime)
35 hours (35 regular)
46 hours (40 regular + 6 overtime)
155 x $15 = $2325
15 x $19.50 = $292.50
$2617.50

Once you’ve gone through the calculation regime a few times, keeping track of regular and overtime pay is simple. There are a few extra factors, however, that bear keeping in mind.

A major factor to keep in mind is commission, particularly for retail workers for whom commissions make up a large part of their salary. As an employer, you’ll have to do a couple quick, extra calculations every week for sales employees.

It’s easier than it looks, however. Take the employee’s earnings at their regular pay rate and then add what they made that week (or during whatever period you’re working with) in commissions. Then divide it by the number of hours worked in that period. For a NYC worker, this might look like the following:

Week 1:
Regular pay:
40 hours x $15 ($600) + commission ($250) = $850
$850 / 40 = $21.25

Add in overtime hours and a weekly calculation might look like the one below:

Week 2:
Regular pay:
Overtime pay:
Total regular hours:
Total overtime hours:
Total:
46 hours x $15 ($690) + commission ($250) = $940
$940 / 46 = $20.43
$20.43 x 1.5 = $30.65
40 x $20.43 = $817.20
6 x $30.65 = $183.90
$1001.10

While, in many other states, bonuses are also taken into account when calculating regular and overtime rates, in New York this is not the case. In fact, there are a number of state-specific directives as to what payments cannot be factored into this process:

  • Expenses that were made on the employers behalf;
  • Any and all premium payments made related to either overtime, weekend or holiday work;
  • Discretionary bonuses;
  • Any bonus or gift payments connected to special occasions;
  • Payments made during sick leave, paid holidays or vacation.

Sometimes a worker holds two positions in one company that are paid out differently. In this case, the regular pay rate would be calculated by taking the total amount earned that week and dividing it by the hours worked. This means that calculating overtime will be slightly different each week (if the hours worked are not consistent).

Position 1:
Position 2:
Total weekly earnings:
Regular pay rate:
Overtime pay rate:
20 hours x $18.00 = $360
10 hours x $15.00 = $150
$510
$510 / 30 = $17.00
$17.00 x 1.5 = $25.50

Who Is and Isn’t Qualified for Overtime Pay in New York?

The right to overtime pay isn’t enjoyed by all workers. The FLSA was written to protect certain employees from exploitation, manual laborers in particular, and so there are a number of jobs that are exempt from overtime law.

At least one of the following two conditions have to be met if an employee intends to claim income pay in a given workweek:

  • They have to earn under $455 that week (yearly: $23.660);
  • Their job cannot appear in the exemption list included below.

Manual laborers are automatically given protection under the FLSA. These include positions like factory workers as well as first responders (firefighters, police officers, paramedics) as well as paralegals and nurses.

The FLSA sets down a list of jobs that are exempt from overtime pay in cases when an employee earns a weekly salary of more than $455:

Executives (who manage more than two people full-time);
Administrative workers;
Non-manual professional workers (artists, teachers, programmers);
External salespeople;
Independent contractors;
Certain transportation and agricultural workers;
Certain live-in employees.

In New York, additional jobs are also exempt:

  • Babysitters, particularly when working part-time and inside the employer’s home;
  • Salespersons;
  • Taxi drivers;
  • Summer camp counsellors;
  • Employees of religious, educational or charitable summer camps;
  • College students employed on campus, even by nonprofit groups;
  • Apprentices, students, learners or people with disabilities working for certain nonprofit institutions;
  • Farm workers;
  • Apprentices generally.

Additional rules can apply for non-profit employees, restaurant and hotel workers, domestic workers and employees working in the building services industry.

Check in with the FLSA and New York labor regulations if you have any other questions related to overtime exemptions.

Track Overtime Using actiTIME!

New York overtime regulations can seem intimidating, but informing yourself helps you to make sure all your employees are paid fairly. It also saves a lot of headaches down the road by preventing simple mistakes.

Which is why our team here at actiTIME has already done most of the heavy lifting. In addition to resources like this one, we offer products that help business with overtime payments so that you can go back to doing what you do best. Visit this page for more details.

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