Administrative Exemption to Overtime Pay

Both the Fair Labor Standards Act (“FLSA”) and the New York Minimum Wage Act (“NYMA”) generally require the payment of overtime wages for work performed after 40 hours per week.  For some general information on overtime and misclassification issues, please see our prior blog posts here, here and here. The FLSA and the NYMA exempt employees who work in a bona fide administrative capacity from the overtime pay requirements.

To meet the Administrative Exemption (and therefore have no entitlement to overtime pay), each of the following must be true:

  1. The Employee’s primary duty consists of the performance of office or non-manual field work directly related to management policies or general operations;
  2. The Employee customarily and regularly exercises discretion and independent judgment;
  3. The Employee regularly and directly assists an employer or an employee employed in a bona fide executive or administrative capacity or who performs under general supervision, works along specialized or technical lines requiring special training, experience or knowledge; and
  4. The Employee is paid for his or her services on a salary basis of not less than $543.75 per week.

If you believe you have incorrectly been classified as exempt from overtime pay, you should contact one of our NY Overtime Pay Attorneys.

Overtime Violations and Misclassification Issues

OVERTIME VIOLATIONS Unless you are specifically classified as an “exempt” worker, your employer must pay you overtime wages for any hours you work over 40 hours in a workweek (see this prior blog entry). Your employer must pay overtime wages at a rate of at least one and one-half times (150%) your regular hourly rate.

Your employer cannot avoid paying overtime by enacting a no-overtime policy or by getting you to agree to a special deal.  Your employer must pay you according to the law.  Set forth below are some common overtime violations:

Unpaid or Improperly Calculated Overtime Pay

Overtime rules are generally based on a single workweek. If you are a non-exempt employee, you may be paid weekly, bi-weekly, or monthly.  But, your employer must calculate overtime based on the actual 40-hour workweek (the pay period does not matter).  Employers cannot average hours over two or more weeks.  Likewise, your employer cannot get you to agree not to follow the overtime rules.

Comp Time Instead of Overtime Pay

Compensatory time is paid time off generally granted to an hourly employee instead of overtime wages.  This is often referred to as "comp time."  Comp time can sometimes be legal, but the employer must pay it at 150%, which is the same rate as overtime wages.

Employees Not Allowed to Report Work over 40 Hours Per Week

Many employers have rules that no overtime work will be permitted or paid for unless authorized in advance.  Some employers choose to ignore overtime hours worked by their employees or do not allow employees to report their overtime hours. These are violations of the overtime rules.


In today’s tough economy, employers face increasing pressure to lower wage and benefit costs. Not surprisingly, some employers do not obey the rules regarding classification of employees, which classification dictates whether its employees are entitled to overtime.

Has your employer not paid you overtime because you are an “exempt” employee? Or, has your employer not paid you overtime and benefits because you are a contract employee or independent contractor?   Your employer may have misclassified you.  And if so, you are losing out on the pay and benefits you deserve.

Misclassification of Employees as Exempt Workers

Exempt employees are employees who are not entitled to receive overtime pay.  Whether or not you are exempt can be confusing.  However, it has nothing to do with your job title or job description, or whether you are paid a salary or hourly. What you actually do at your job on a daily basis determines whether or not you are legally entitled to overtime.  For additional information, please visit

Misclassifaction of Employees as Contract Employees

Contract employees or independent contractors include self-employed workers who are not covered by the tax and wage laws that apply to regular employees. Employers do not pay Social Security, Medicare, or federal unemployment insurance taxes on contract employees or independent contractors.  Thus, employers are strongly motivated to classify workers into this category to save costs.

Whether you qualify as an employee or an independent contractor is not an easy matter.  Three factors are key in determining this:

1.  Control:  Does the company control what you do and how you perform your duties? 2.  Financial:  Do you or the company set the business aspects of your work (method of payment, reimbursement of expenses, etc.)? 3.  Relationship:  Do you have a written contract? Do you receive employee-type benefits, such as a pension plan, insurance, or vacation pay? How long have you been at the company?

You are probably an employee and not an independent contractor or contract employee if the company controls what you do and how you do it, and treats you like other regular employees.  If so, you may be missing out on valuable overtime wages and employee benefits.  For more information on this issue, please see

Some other common employer pay practices which may violate the law:

  • Paying you a salary and no overtime when you spend less than 50% of your time managing other employees;
  • Paying you a salary and no overtime with a title like assistant manager, assistant branch manager, or working lead;
  • Paying you hourly and not paying you overtime when you work in excess of 40 hours in any work week;
  • Paying you hourly and not paying you for pre-shift or post-shift work time such as uniform and clothes changing time, the time it takes you to prepare your workstation for the day, or clean up time at the end of your shift;
  • Paying you hourly, but asking you to perform work via cell telephone, email, Blackberry, Twitter, Facebook, etc. when you are not clocked in;
  • Paying you hourly, but asking you to work through your breaks and unpaid meal periods without payment;
  • Rounding you work time down to the nearest 15 minute increment (e.g., you clock in at 7:56 am and your employer rounds your time to 8:00 am); or
  • Hiring you as an “independent contractor,” “contract employee,” or “contingent worker” and not paying you overtime or benefits like regular employees.

Please contact us if you believe your employer has violated the law in paying or classifying you.