overtime laws

Proposed Changes to FLSA Overtime Rules - Part I

On June 30, 2015, the United States Department of Labor (DOL) released proposed regulations that would amend various provisions of the Fair Labor Standards Act (FLSA).  In particular, the DOL proposed changes to the regulations governing the “white collar” exemption for executive, administrative, and professional employees.   The FLSA (and wage and hour laws, generally) are complicated but we will try to break down the key changes as simply as possible.

FLSA Overview

The FLSA generally requires employers to pay its employees at least the federal minimum wage plus overtime at a rate of at least 1.5 times the employee’s regular rate of pay for any hours worked over 40 in a week.  However, the FLSA provides for various exemptions from the overtime requirement.

The most commonly used exemptions are for executive, administrative, and professional employees, and are often referred to as the “white collar” exemptions.  However, the FLSA does not define the terms “executive,” “administrative,” “professional,” or “outside salesman” and the regulations have generally required that each of the following three tests be satisfied for the exemption to apply: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”); (2) the amount of salary paid must meet a minimum specified amount (the “salary level test”); and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (the “duties test”). 

The regulations also exempt “highly compensated” employees who “customarily and regularly” perform one of the exempt duties of an administrative, executive or professional employee, but who do not otherwise meet the duties test.  Currently, and since 2004, an employee earning $100,000 in total annual compensation (with at least $455 paid weekly on a salary or fee basis) would be exempt from overtime as a highly compensated employee.

Salary Basis Test – NO CHANGE

There were no proposed changes to the first requirement that employees be paid on a predetermined and fixed salary that is not subject to reduction.

Salary Level Test – BIG CHANGES!

Currently, and since 2004, any employee earning less than $455 per week ($23,660 a year) is considered “nonexempt” and therefore entitled to overtime pay for hours worked over 40 in a week, regardless of whether the employee is paid on an hourly or salary basis.

Under the DOL’s proposal, the salary level required for an executive, administrative or professional employee to qualify for exemption from the FLSA minimum wage and overtime requirements would increase from $455 a week ($23,660 a year) to $921 a week ($47,892 a year), based on 2013 data.  This means that anyone who makes less than $47,892 a year will be entitled to overtime pay for hours worked beyond 40.

The proposed regulations also set forth mechanisms for annually updating the minimum salary and if one of the annual update mechanisms is implemented, the DOL anticipates that the annual salary requirement in 2016 will be $970 a week, or $50,440 a year.

Duties Test – STAY TUNED

The DOL did not propose any changes to the duties requirements but did seek comments as to whether the duties tests should be updated.  Please stay tuned for Part II of this series for an outline of the current duties test. 

Highly Compensated Employees - CHANGED

The DOL’sproposed regulations increase the required salary for “highly compensated employees” to $122,148, indexed to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers.

The DOL’s proposed rule would effectively extend overtime protections to nearly 5 million white collar workers within the first year of its implementation.  Because the overtime regulations have not been updated in so long, employers have been able to classify more and more employees as exempt and therefore avoid paying overtime.  The overtime exception was originally meant to apply to highly-compensated executive, administrative, and professional employees although it now applies to workers earning as little as $23,660 a year. 

The DOL is expected to release its final rule later in 2016. 

Am I Entitled to Overtime if I am on Salary?

Maybe.

Just because your employer pays you a salary does not necessarily mean you are ineligible for overtime.  In other words, you may be entitled to receive overtime even if your employer tells you that you are not.

Whether or not an employee is entitled to overtime depends on the following factors:

  • First, you must make at least $455 per week. 
  • Next, you must be treated like a salaried employee – you cannot get docked for working less in a given week.  You must get paid the same every week, no matter what.
  • Finally, there is the nature of the work you do.  The more responsibility (and less supervision) you have, the more likely it is that you are not entitled to overtime.  And vice versa.

Confused?  Curious?  Just want to chat?  Contact us.  An employment lawyer is standing by to speak to you right now.

Can you get overtime if paid salary?

Are you entitled to overtime if paid salary?  Maybe.

How you are paid does not impact whether or not you are entitled to overtime.  This is true regardless of whether you are paid by the hour, by the day or by the week.  It also holds true if you are paid an annual salary. What matters is what you do, not how you are paid.  Whether or not you are exempt from federal and state overtime laws depends almost entirely on the nature of your work.

A common trick used by unscrupulous employers is to pay an otherwise non-exempt (i.e. entitled to overtime) employee a "salary" so that the employee - erroneously - believes that he/she is not entitled to overtime.  The employer's decision to pay a salary does not change the employer's obligation to pay certain employees time and a half for hours over forty in a week.  Another misconception is that if someone has a "manager" or "supervisor" title that they are not entitled to overtime.  Titles do not matter - only what you do matters.

While how an employee is paid (salary versus hourly) may impact the calculation of damages (i.e. how much you could win in a lawsuit), it will not impact liability (i.e. whether the employee is entitled to overtime compensation to begin with).

If you believe that you have been denied overtime, or if you have questions about overtime if paid salary, you should contact us today.  Consultations are free - you have nothing to lose.

For more information:

Overtime Law Basics - Debunking Overtime Myths

Q&A - NY Overtime Law

 

 

 

Overtime Law Basics - Debunking 5 Overtime Myths

Overtime Law Basics Basics - Five Common Misconceptions About Overtime Law

This is the first in our ongoing series of overtime law basics.  Below, we go through some of the most common misconceptions about overtime law.  You should educate yourself about your rights as an employee.  Especially when it comes to how you should get paid.  Any questions, call us at 646.524.6001 for a free consultation.

  1. Your title means nothing. Even if you have a “supervisor” title, you may be entitled to overtime. Just because you are called a supervisor, this does not necessarily mean that you are not entitled to overtime pay. There are several factors used to determine whether an employee is entitled to overtime, and none of these factors includes the employee’s title. Your title has nothing to do with your entitlement to overtime.
  2. How you are paid does not determine whether you can get overtime. If you are paid a salary, you may be entitled to overtime. Just like your title, how you are paid does not necessarily make you ineligible for overtime. In fact, many salaried employees are entitled to overtime based on what they do – not how they are paid. Employees paid on a salary basis are only exempt from overtime if they meet all of the requirements for certain exemptions under the Fair Labor Standards Act (Federal Law) or New York Labor Law (State Law).
  3. Your employer may not give you time off instead of overtime pay. Time off may not be provided instead of overtime pay. Only certain municipal, state or federal employers can provide time off in lieu of overtime pay. Private employers are forbidden from doing so – they have to pay overtime.
  4. All time worked, including time spent working from home counts towards your hours. Work from home is no different from work at the workplace. If you work from home, let your employer know about it – this time counts towards overtime.
  5. Time spent traveling for work counts towards your hours. If you have to travel for your job, time spent traveling counts your overtime hours – but your commuting hours to/from work do not. However, if you have to travel between job sites, to meet a client, or make a delivery, these hours all count towards overtime.

If you have any questions, please contact us.

Q&A: NY Overtime Law | NY Overtime Pay

Do I have an overtime claim? If you think that you may have an overtime claim, chances are that you do.  Below are a few frequently asked questions about New York Overtime Law that can help you to determine whether you have an overtime claim or a claim under the Fair Labor Standards Act (“FLSA”) or NY Overtime Law Law.  If you think you are entitled to overtime, you should contact us for a free consultation.

Q: What do the terms overtime hours and overtime pay mean?

Overtime hours means the time an employee works more than 40 hours per work week.  Under federal law and the NY Overtime Law, overtime pay must equal at least one and one-half times an employee's regular rate of pay. So, if an employee regularly makes $10/hour, that employee is entitled to make $15/hour for all the overtime hours he or she works.

Q: Who must be paid overtime pay?

Most employees are entitled to overtime pay.  You are probably entitled to overtime pay unless your job is an "executive," "administrative," and "professional" positions.  Whether or not you fall into one of these categories depends on the specific nature of your job.  If you have questions about NY Overtime Law, you should talk to a lawyer.

Q: What if I have no written records or proof of the hours I worked?

You do not need written records or proof of the number of hours you worked. It is the employer's duty to maintain certain records regarding your work hours and pay.  If your employer does not have those records, your testimony under oath will be sufficient to prove your claim.

Q: Do I have to be paid overtime pay for working more than eight hours in one day?

No. Overtime pay must only be paid when you work more than 40 hours in week, and not more than eight hours in any one day.

Q: What if my employer tells me that I am an independent contractor?

You may still be entitled to overtime pay because your employer may be wrongly telling you that you are an independent contractor. Whether or not you are an independent contractor depends on a variety of factors that we will need to discuss with you before we can give you an answer.

Q: What if I work 30 hours in one week and 50 hours in the next week, can my employer average the two weeks to avoid paying me overtime?

No. This is a common method employers use to avoid paying overtime. The averaging of workweeks is expressly prohibited by law. You are entitled to receive overtime pay for each individual week you work more than 40 hours. In the above example, you are entitled to receive overtime pay for the 10 hours you worked more than 40 hours in week two.

Q: Is it legal that I am paid "comp time" instead of overtime?

Unless you work for the state or federal government, an employer providing compensatory or "comp time" instead of overtime pay is illegal.

Q: My employer tells me I am exempt from the overtime pay laws, am I?

Not necessarily. You are exempt based on your job duties and responsibilities and not based on what your employer calls you. It makes no difference if your employer calls you exempt or gives you a job title such as "manager" or "supervisor." It is a common practice for employers to give workers the title of "assistant manager" to avoid paying overtime when those employees are not exempt and should be paid overtime.

Q: Can I still be entitled to overtime pay if I am a salaried rather than hourly employee?

Yes. This is one of the common misconceptions about overtime pay. You are not exempt just because you are paid a weekly salary. If you are not otherwise exempt under the FLSA, your employer must convert your weekly salary to an hourly rate and pay you time and a half for all hours worked in excess of 40 hours.

Q: When should I file a claim against my employer?

The longer you wait the less overtime pay you may be able to recover. It is also best to promptly pursue your claim so that time records and witnesses are readily available.

Q: Can my employer fire me for bringing an overtime claim against it?

No. It is illegal for an employer to fire or in any way retaliate against an employee because he or she has filed a claim for overtime against the employer. We will help protect you if your employer tries to retaliate against you for filing an overtime claim.

Q: What should I do if I believe that I am owed overtime pay?

You should seek legal advice. The overtime laws are highly technical and we can help apply the law to your special situation. Our experienced NY Overtime Lawyers provide free consultations and will tell you if you are owed earned wages and if we can help you.

Q: How much does it cost to file a claim?

In most cases, all costs for overtime and unpaid wage cases will be advanced by our firm. Because our fee is typically contingent on a recovery from the employer, the firm does not get paid or reimbursed for expenses until the recovery is made.

Q: Do I have to pay attorneys fees to you if I lose my case?

No. We will only receive a fee if we are successful in resolving your claim.