As we are approaching the end of 2017, understanding the federal and state overtime rules is necessary, as certain thresholds will change. The current federal law requires employers to pay non-exempt workers time and a half for all hours worked beyond 40 in a workweek. A workweek does not have to be the same as a calendar week, it can be defined as a regularly recurring block of seven consecutive 24-hour periods. The Fair Labor Standards Act, “reserves to states the right to enact more-generous overtime laws.”[i] In New York State, we see a difference in non-exempt and exempt salary definitions for the Executive and Administrative exemption definitions, which currently follow the FLSA definition on duties tests.
Below are 3 definitions in federal and state overtime pay rules:
- Holiday, Vacation, PTO and Sick Leave OT Accrual: Under current federal and NY state FLSA regulations, overtime does not have to accrue on top of leave. If a holiday falls in a seven-day workweek and an employee works 40-hours, the 4 remaining days during the week, the employee would be eligible for 48-hours of pay at straight time rate. However, I have seen employers accrue overtime on top of leave time. Be consistent with your overtime payments and ensure it is in your policy. If you make a change to not accrue, communicate the change to your workforce.
- Executive and Administrative Exemption: The federal FLSA has an overtime threshold at $455 per week. In NY State (Southern Tier), the threshold for Executive and Administrative positions is $727.50 per week. This will be increased to $780.00 per week after 12/31/17. We could see changes to the federal FLSA in 2018, under the current administration, but no changes have been decided, currently.
- $727.50 per week on and after 12/31/16
- $780.00 per week on and after 12/31/17
- $832.50 per week on and after 12/31/18
- $885.00 per week on and after 12/31/19
- $937.50 per week on and after 12/31/20[ii]
https://labor.ny.gov/formsdocs/wp/Part142.pdf
- Multi-State Employers: Research current laws and regulations at the federal and state level. Laws across the country vary by state. Laws regarding overtime pay and double time pay will vary. Industry specific laws also exist in certain states. “Employers must also be industry-specific daily overtime rules-such as in Oregon, where manufacturing workers must be paid premiums working 10 hours.”[iii]
The Fair Labor Standards Act was established in the 1930’s and regulations have evolved, as our society has evolved. We continue to see significant changes at state levels and could see changes at the federal level, related to exempt and non-exempt thresholds, as well as minimum wage. December 2017 is approaching quickly, ensure that your executive and administrative positions are defined and legal under current NY State exemption law. Also remember that minimum wage will be increase in NY State. Are you prepared? Do you have updated labor and employment posters? If you are unclear in defining the roles, seek guidance.
[i] https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/state-overtime-pay-rules-differ-from-federal-law.aspx
[ii] https://labor.ny.gov/formsdocs/wp/Part142.pdf
[iii] https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/state-overtime-pay-rules-differ-from-federal-law.aspx
-Matthew W. Burr
BURR CONSULTING, LLC 