The Fair Labor Standards Act (FLSA) is a federal law that sets requirements for employers to pay employees overtime. There’s been a lot of buzz recently about the changes set to take effect in January 2020. In this post, we address the most common questions about the new federal overtime rule.
What is overtime pay? Generally, overtime pay is time-and-a-half which must be paid for hours worked above 40 hours in a given workweek.
What is a “week” for purposes of calculating overtime pay? An employer gets to define when the workweek starts and ends. Any fixed and regularly recurring period of 168 hours may be the workweek for purposes of calculating overtime. It’s important to have a consistent workweek throughout the year.
Who needs to be paid overtime? The requirement to pay overtime applies to non-exempt employees.
How do you determine if an employee is exempt or non-exempt? It largely depends on the type of work the employee performs. It also is based on how much the employee is paid.
What changed about the federal rule? Currently, employees are eligible for overtime under federal law if their standard salary is $455 per week ($23,660 per year) or less. Effective January 1, 2020, however, this threshold increases to $684 per week ($35,568 per year).
Do New York employers still need to comply with State law overtime requirements? Yes.
How will the change in the federal law impact New York employers? The changed compensation threshold set by federal will be of minimal impact for New York employers. Instead, New York employers should be mindful that the State’s current threshold for overtime pay ($832 per week) will increase to $885 on December 31, 2019.
How can I avoid paying employees overtime? The best ways to avoid the requirement to pay overtime is to schedule employees such that they do not work more than 40 hours in a workweek. Employers aren’t permitted to average an employee’s hours from week to week in order to avoid overtime pay. Employers also aren’t permitted to call someone “exempt” simply to avoid paying overtime.
Remember, it’s important to obtain legal advice from a licensed attorney, as blogs aren’t legal advice; they’re merely educational. If you have questions about whether your business is complying with State and federal requirements, contact us.