overtime payments

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.

Failure to Pay Overtime in NY | Failure to Pay Overtime NJ

Failure to Pay Overtime in NY | Failure to Pay Overtime NJ

Failure to Pay Overtime
Failure to Pay Overtime

Most employees are entitled to receive one and a half (1½) times their regular hourly rate of pay for work performed in excess of forty hours per week.  All time worked must be counted in calculating overtime including, all work activities and activities before and after a shift, as well as work done at home. Activities performed before assigned shifts, such as logging on to computer systems, programs, and applications, dressing in required clothing or protective gear, or preparation and/or inspection of machinery, tools, equipment or supplies are counted in determining whether the employee is entitled to overtime wages.   Similarly, answering emails and texts from home is considered hours worked for purposes of calculating overtime. Failure to pay overtime in NY and NJ is illegal.

Some employers fail to pay overtime because of misclassification of jobs as exempt from the federal or state wage and hour laws.  This may be the result of wrongful application of the complex tests prescribed under applicable laws or regulations or failure to consider deductions from pay.  Just because your employer tells you that you are not entitled to overtime does not make it so.

If you believe you have been denied overtime pay in New York or New Jersey, you should consult an attorney experienced in wage and hour claims.

Am I Entitled to Overtime?

Most employees are entitled to overtime if they work over 40 hours/week.  Just because you are paid a salary does not mean that you cannot get overtime.  Nor can your company offer you “comp time” instead of paying you.  If you are entitled to overtime, you must be paid time and a half for any week you work over 40 hours. You are not entitled to overtime if:

You are an executive: This means your weekly salary is at least $455, and your primary job duty is managing the company or a department/subdivision.  You must also to supervise at least two full-time employees, and have the authority to hire/fire them, or at least make recommendations on hiring/firing.

You are an Administrator: This means your weekly salary is at least $455, and your primary job duty is office or non-manual work directly related to management or business operations.  Your job must involve using discretion and independent judgment regarding matters of significance.

You are a “Learned Professional”: This means your weekly salary is at least $455, and your primary job duty is performing work requiring advanced knowledge, predominantly intellectual, and the consistent exercise of discretion and judgment. For example, doctors, and registered nurses are learned professionals.

You are a “Creative Professional”:   This means your weekly salary is at least $455, and your primary job duty is requires invention, imagination, originality or artistic talent.

You are a “Computer Employee”: This means your weekly salary is at least $455 you are a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field.  Your primary job duty must be applying systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; or design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; or design, documentation, testing, creation or modification of computer programs related to machine operating systems; or a combination of these.

You are an outside sales professional:   This exemption applies where the primary job duty is making sales, obtaining orders or contracts for services or use of facilities and you regularly work away from the company’s place of business.

You are a highly-compensated employee: People who make over $100,000 a year are generally exempt from overtime.

You are a motor carrier: Drivers, driver’s helpers and mechanics (as well as others involved in vehicle safety or a motor vehicle used as transportation, the FLSA does not apply to you and the relevant law is the Federal Motor Carrier Act.

These are some of the main exemptions but there are many more.

If you think that you have been denied overtime, please contact us.  At attorney from our firm will get back to you within 24 hours.

NY Overtime Lawyers

NY Overtime Lawyers New York Overtime rules provide that you are entitled to overtime in New York for any amount of time worked over 40 hours.  Specifically, you are entitled to 1.5x your hourly rate for any overtime in excess of 40 hours.  If you have been denied overtime in New York, you may be entitled to additional damages beyond the wages that are already owed to you. New York Overtime Rules also provide for numerous exemptions.  For example, administrators, executives and professionals earning a minimum of $455 per week are exempt and not entitled to overtime.  But often, employers misclassify employees and tell them that they are exempt from overtime when they are not. Our NY Overtime Lawyers can help.

New York Overtime Rules are very complicated.  If you have not been paid overtime for any reason, please contact a NY Overtime Lawyer at our firm for a free initial consultation.  Know your rights!

NY Overtime Pay | How to Calculate Overtime Pay

How do I calculate Overtime Pay? Just because your boss tells you that you are not entitled to overtime does not make it true.  Countless people are misled into believing that they are not entitled to overtime.  To determine how much you might be owed, calculate as follows:

If you are an hourly employee:

●         Multiply your hourly rate by 1.5.  If you normally make $20 for every hour worked, multiply this by 1.5 to get to $30 per hour of overtime.

●         Multiply your total number of hours over 40 in a week by your overtime rate.  If you worked 45 hours, you are owed 5 overtime hours of overtime at $30 per hour of overtime, your company owes you $150 for overtime pay.

If you are a salaried employee:

●         Determine your weekly salary.

●         Determine your overtime premium rate.  To determine your overtime premium rate first, calculate your regular hourly rate by dividing your weekly salary by the number of hours worked that week.  Divide this number by two for your overtime premium rate.

●         If you are entitled to overtime, the company owes you your weekly hours over 40 times your overtime premium rate.

 

If you believe that you have been denied overtime pay as a NY or NJ employee, please contact us.

Failure to Pay Overtime Wages

Failure to Pay Overtime Wages is illegal. Most employees are entitled to receive one and a half (1½) times their regular hourly rate of pay for work performed in excess of forty hours per week.  All time worked must be counted in calculating overtime including, all work activities and activities before and after a shift, as well as work done at home. Activities performed before assigned shifts, such as logging on to computer systems, programs, and applications, dressing in required clothing or protective gear, or preparation and/or inspection of machinery, tools, equipment or supplies are counted in determining whether the employee is entitled to overtime wages.   Similarly, answering emails and texts from home is considered hours worked for purposes of calculating overtime. Some employers fail to pay overtime because of misclassification of jobs as exempt from the federal or state wage and hour laws.  This may be the result of wrongful application of the complex tests prescribed under applicable laws or regulations or failure to consider deductions from pay.  Just because your employer tells you that you are not entitled to overtime does not make it so.

If you believe you have been denied overtime pay, please contact us for a free initial consultation.  An attorney at our firm will get back to you within 24 hours.