New York Unpaid Overtime
New York Unpaid Overtime Laws
New York law requires that most employees receive overtime pay when they worked beyond 40 hours in a given workweek. Overtime is usually calculated as 1.5 times an employee’s regular hourly rate.
There are several categories of workers that are exempt from overtime, meaning that New York law does not require them to be paid overtime. The most common exemptions are based upon an employee’s duties and salary, meaning that they may be entitled to overtime if their salary is low.
Exemptions under New York state law are similar to exemptions under federal law. However, New York requires payment of overtime at a rate no less than the state minimum wage for certain occupations that are exempt under federal law.
Overtime is paid at 1.5 times an employee’s regular hourly rate, whether they are paid a single hourly rate, a salary, multiple rates, or a piece rate. The regular hourly rate may be calculated as the average rate received by an employee over all their hours worked in a given workweek and therefore may change week to week in certain circumstances. Usually, business expenses, certain types of bonuses called discretionary bonuses, and vacation and holiday pay are not included in calculating overtime rates.
Although calculating overtime is usually relatively easy, especially if you have a paystub that shows your hours and hourly pay, navigating New York and federal overtime laws is far from simple. Below are some of the most common questions we receive about overtime eligibility and recovery for New York employees.
Frequently Asked Questions About New York Overtime
Positions that commonly encounter overtime violations include:
- Restaurant tipped workers, including servers, hostesses, waiters and waitresses, bussers, delivery workers
- Restaurant non-tipped or back of the house workers, including cooks and dishwashers
- Construction and landscaping workers
- Domestic workers and home health care workers
- Grocery stores, warehouses, and retail stores
- Janitors, sanitary workers, and other cleaning contractors
- Administrative staff and help-desk employees
- Hotel and hospitality staff
- Security guards and building services workers
- Temp workers
- Merchandisers and delivery drivers
True independent contractors are exempt, but be aware that New York law has strict requirements about who is correctly classified as an independent contractor. If you consistently work for one employer, have a set schedule, do not run and operate your own business, are told how and when to work by a supervisor, and your work is part of the services offered by the company, then you are probably not an independent contractor.
For most exemptions, there is both a “duties” test and a “wages” test to determine if an employee is exempt or whether they are entitled to overtime. Note that many employees perform some duties that fall within an exempt classification but may still be entitled to overtime depending upon the specific factors of their work. The most common overtime exemptions are:
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- Administrative Employees such as a chief of staff who use their independent judgment to make significant business decisions
- Executive/Management employees such as managers who regularly manage multiple employees and have some authority to discipline, hire and fire employees.
- Professional Employees who are required to have certain advanced degrees, such as lawyers, doctors, and teachers.
- Computer Employees such as systems analysts and software engineers who work closely with computer systems. This does not include all people who simply use their computers to work or people who repair or install computers.
- Outside Sales employees whose primary duty is making sales or getting orders from external clients and who frequently work outside the employer’s place of business.
- Certain truck drivers are exempt from overtime, depending upon the types of trucks driven, whether they cross state lines, and what types of passengers or cargo they carry
- Government employees and certain employees of religious orders. Some employees of non-profit organizations are exempt, but this depends upon the nature of the organization and the work performed.
New York law allows employees to recover six years of unpaid wages, plus in many instances an eight-month tolling period for claims arising during the COVID-19 pandemic.
New York and federal law offer options for employees who want to pursue unpaid overtime as a group or on behalf of other employees.
Federal law allows for a “collective action.” There is no minimum number of employees for a collective, and it requires employees who similarly situated, meaning they have experienced similar wage and hour practices as the original plaintiff, to “opt in,” usually by filing out a simple form.
New York law provides for “class actions.” The standards for certifying a class are a bit higher and usually require at least thirty, preferably forty or more, employees who work in similar positions and experience similar wage and hour practices. The advantage of a class action is that once a class is certified, employees do not need to take any action; they are automatically included unless they “opt-out.”
We often file “hybrid” actions, meaning that it is both a collective and class. This gives us maximum flexibility in representing groups of employees who have all been underpaid in the same way. If you are not receiving overtime and know that other employees who have similar jobs also don’t receive overtime, you could be eligible to pursue an overtime class action lawsuit. This is an important and meaningful way to fight back against wage theft, make your voice heard, and often have a better chance of recovering your wages.
Wage theft occurs when employers fail to pay workers wages that are required by law, including minimum wage and overtime. New York also requires spread of hours payment for many workers, including food service and hotel workers as well as non-exempt employees who are paid the minimum wage.
Wage theft costs employees, especially the lowest-paid workers in society, billions of dollars per year in unpaid minimum wage and overtime.
Wage theft can take many forms. Sometimes wage theft is obvious, such as when companies pay an hourly rate that is too low. Often times wage theft is harder to detect and can occur when companies automatically deduct meal breaks, misclassify employees as exempt, take illegal deductions, pay salaries to non-exempt workers, and take the tip credit without following New York’s strict rules for tipped employees.
Overtime is required for all hours of work, including trainings and meetings. Trainings and meetings should always be paid. It is the company’s duty to track time worked, including trainings and meetings.
There are different rules for pre- and post-shift time, including standing in security lines, “donning and doffing” uniforms and personal protective equipment, loading tools and equipment, setting up workstations, and sidework. In general, when these tasks are mandatory and closely related to an employee’s regular job duties, it is more likely that such time must be paid.
There are also rules for when stand-by time must be paid. As a general matter, the more restricted an employee is during stand-by time, the more likely they must be paid for waiting. Pay is usually required when an employee is required to wait at an office for a job assignment, but pay is probably not required when an employee simply takes home a pager that may or may not ever alert them. However, if the pager does call in the employee to work, all work time must be paid.
New York has a number of rules regarding mandatory breaks and when breaks are included in hours worked.
The standard rule is that short breaks (breaks less than about 20-30 minutes) are counted as hours worked. Breaks that last 30 minutes are not counted as hours worked, but only if a worker is completely relieved of duty during that time. If breaks are interrupted, the time should not be deducted from hours worked.
Overtime Law
Overview
HOW TO DETERMINE YOUR OVERTIME WAGES
Overtime Calculator
In many cases, calculating unpaid overtime is straightforward. In others, where workers are paid different rates for different kinds of work, paid piece rates or may be paid according to the “fluctuating work week,” calculations may be more complicated.
Am I entitled to overtime?
There are two categories of workers who are generally not entitled to overtime: “exempt” employees and independent contractors and similar workers, discussed below.
Contrary to popular belief, it is not enough to simply receive a salary to be considered exempt. In addition to receiving a minimum wage rate, employees can only be considered exempt if their duties fall within one of the “exemptions” contained in federal and state law.
In other words, an employee must satisfy both a wage test and a duties test to properly be considered exempt.
If an employee does not satisfy one of these two tests, they cannot be classified as exempt and they are owed overtime for all hours worked. More information is provided below as a guide to give you a sense of what kinds of employees are properly classified as exempt. However, the rules are often changing due to executive orders, change in the law, and court decisions that change how the law is interpreted.
In order to receive the most accurate and up to date information specific to your situation, you should contact experienced employment attorneys who can evaluate the conditions of your employment. The attorneys at Pelton Graham LLC have years of experience pursuing claims on behalf of employees who are owed overtime due to failure to pay overtime and misclassification.
Exemptions
Independent Contractors
Federal law states that independent contractors are not protected by wage and hour protections. In other words, workers correctly classified as independent contractors may be paid less than minimum wage and do not need to be paid overtime. Because independent contractors may legally be paid less than employees, employers often misclassify their workers as independent contractors even though under the law they should be considered employees.
A worker cannot agree to be classified as an independent contractor. Receiving a 1099 form does not automatically mean a worker is an independent contractor. The tests for classification depend on many aspects of a worker’s duties, not on the classification made by an employer.
There is no single test or rule in place for determining whether a worker is an independent contractor. Courts look at many factors that together make up the “economic reality” of the relationship between the worker and employer. As a general matter, the more control and supervision an employer exercises over a worker and how he or she does their job, the more likely that worker is an employee.
Some of these factors include:
- How much the worker’s duties are a central part of the business
- Whether the relationship is long-term or temporary
- How much the worker invests in work expenses and equipment
- The amount of control exercised by the employer
- The worker’s opportunities for profit or loss depending on their own initiative
- Whether the worker places their services on the open market or works just for one employer
- Whether and how much the worker operates an independent business
Many states have more restrictive tests of independent contractors that may vary by industry. There are many industries where workers are commonly misclassified as independent contractors in order for the employer to save money. Just because a practice is widespread does not mean it is legal.