Overtime Pay: Understanding Your Rights and Compensation

The FLSA establishes the baseline for overtime pay across the United States, but New York State has implemented its own Labor Law provisions that sometimes exceed federal minimums. Section 651 of the New York Labor Law addresses wage and hour requirements, ensuring that overtime pay calculations are performed correctly and that employees receive all compensation owed to them. Employers in New York must comply with whichever standard provides greater protection to employees, meaning workers may receive benefits under state law that exceed federal requirements. Both federal and state laws require detailed record keeping and timely payment of all overtime compensation earned.

Not all employees automatically qualify for overtime pay under New York law. Certain categories of workers, including executive, administrative, and professional employees, may be classified as exempt from overtime requirements if they meet specific salary and job duty tests. To qualify as exempt, an employee must earn at least a minimum salary threshold, which New York periodically adjusts, and must perform job duties that fall within recognized exempt categories. Employers bear the burden of proving that an employee qualifies for an exemption, and misclassification of employees as exempt when they should receive overtime pay is a common violation that can result in significant liability.

The regular rate of pay for overtime purposes includes not only base hourly wages but also bonuses, commissions, and other forms of compensation that are part of an employee's regular earnings. Under FLSA regulations, the regular rate must include all compensation for services performed, except for certain statutory exclusions such as gifts, discretionary bonuses, and payments for time not worked. New York courts have interpreted these requirements broadly to protect workers, often requiring that more forms of compensation be included in overtime calculations than employers initially recognize. Employers who exclude bonuses or commissions from overtime rate calculations may face significant liability for unpaid overtime pay and related penalties.

Overtime pay compensation depends on accurately tracking all hours an employee works, including time spent on work related tasks outside regular business hours. Employers must count all time during which employees are required to be on premises or are engaged in work activities as compensable hours. This includes time spent in meetings, training, equipment setup, and other job related activities, even if these tasks occur before or after official shift times. Disputes over what constitutes compensable hours frequently lead to overtime pay claims, as employers sometimes fail to count all hours employees have actually worked.

One of the most prevalent overtime pay violations involves misclassifying employees as independent contractors or as exempt salaried workers when they should receive overtime compensation. Employers sometimes intentionally misclassify workers to reduce labor costs and avoid overtime pay obligations, a practice known as wage theft. Misclassification deprives employees of overtime pay, benefits, and other protections afforded to regular employees. When employers engage in such practices, affected workers can pursue claims for unpaid overtime pay, liquidated damages, and attorney fees under both federal and state law. Additionally, matters involving payment disputes may relate to benefits overpayment issues in certain employment contexts.

Employees who have been denied overtime pay in New York can pursue several legal remedies to recover unpaid compensation. Under the FLSA, employees can recover unpaid overtime pay plus an equal amount in liquidated damages, effectively doubling the recovery amount. New York State law provides additional remedies, including penalties for wage violations and potential recovery of attorney fees and court costs. Employees can file complaints with the New York Department of Labor or pursue private lawsuits against employers, often on a collective basis if multiple employees have experienced similar violations. In some cases, employment disputes may intersect with other compensation matters, such as alimony payment obligations, particularly in situations involving income calculations or wage garnishments.

New York employers must maintain detailed payroll records showing the hours worked by each employee, the rates paid, and all overtime pay calculations and payments made. Records must be preserved for at least six years, allowing employees and regulators to investigate potential violations. Employers must provide employees with clear wage statements showing gross pay, deductions, and net pay, including any overtime compensation earned during the pay period. Failure to provide accurate wage statements or to maintain required records can result in penalties and liability for unpaid overtime pay, even if the employer disputes whether overtime was actually owed. Proper compliance with record keeping requirements protects both employers and employees by creating a clear audit trail of compensation and preventing disputes over wages earned.