New York Overtime Pay Basics
In New York, it is assumed that all employees are entitled to overtime pay, even if the employee is paid a salary. It does not matter how a person is paid. There are exceptions, but it is the employers burden to prove that an employee is exempt from overtime pay. In New York, an employee is entitled to overtime pay for each hour worked over 40 in a workweek. An employee must be paid "time and a half" for each hour of overtime worked. "Time and a half" means a 50% increase in pay. For example, if an employee's normal pay rate is $50 an hour, her overtime rate will be $75 an hour. This is a steep increase in pay and this is why many companies try to avoid paying their employees overtime pay.
As mentioned above, some employees are "exempt" from overtime pay. This means they don't get paid an increased rate for overtime. Here is a general summary of the common overtime pay exemptions:
1. Highly Compensated Employees - if an employee earns more than $100,000 a year, then they may be exempt.
2. Managers - employees who manage more than two full time employees and spend most of their time managing these people may be exempt.
3. Professionals - employees with advanced degrees such as doctors, lawyers, and scientists are exempt from overtime pay.
4. Administrators - employees who exercise independent judgment and discretion regarding matters of substantial importance to the employer are exempt. To fit within this exemption, the employee's work must involve running the companies business and not involve producing the goods or services provided by the company. Also, support functions are not exempt. In addition, the employee's work must be free from close supervision, not routine, repetitive, or governed by established procedures.
There are a number of other more specific exemptions, but the four listed above are the more common exemptions. Remember, it does not matter how an employee is paid. The fact that an employee is paid a salary is irrelevant. A person is presumed to be entitled to overtime pay unless their position fits within an exemption.
