Some New York employers think they can avoid paying overtime wages simply by classifying employees as salaried workers. That is not how the law works, however. New York courts have long held that any salary agreement must still ensure that an employee receives at least the applicable minimum wage per hour, including any necessary overtime premium. Absent an “express agreement” between the employer and employee, a court will not assume that a salary agreement provides for overtime.
NYC Magistrate Orders Unpaid Overtime, Damages Against Cleaning Company
Here is a recent example from here in New York City. The plaintiff worked for the defendant's cleaning business. He was paid a weekly salary that varied between $550 and $600 during his employment. On average, the plaintiff worked 53.5 hours per week–14.5 hours more than the threshold for requiring overtime.
The plaintiff later sued the defendant for unpaid overtime. The case was tried before a federal magistrate judge, sitting without a jury, who ruled in favor of the plaintiff. The magistrate said it was “undisputed” that the plaintiff regularly worked more than 40 hours per week. There was also no “explicit understand as to how [the plaintiff's] fixed weekly salary would provide overtime compensation equal to one and one-half times [his] regular hourly rate.” Given this, the defendant could not simply hide behind the fact it paid a salary to avoid overtime obligations.
Ultimately, the magistrate said the plaintiff was entitled to “unpaid overtime premiums” of about $14,500. Pursuant to New York Labor Law, the court awarded an equal amount in “liquidated damages.” These are damages owed by an employer who fails to pay overtime and cannot prove to the court's satisfaction that failure was due to an error made in “good faith.” The defendant was also ordered to pay $10,000 in damages for failing to provide the plaintiff with a wage statement that complied with the substantive requirements of New York law. Finally, the magistrate said the defendant would have to pay the plaintiff's attorney's fees, court costs, and prejudgment interest on the unpaid overtime, which added approximately $35,000 to the final judgment.
Do You Need Help With a Wage Hour or Overtime Dispute?
As you can see from the above case, failure to comply with New York overtime laws can prove costly for employers. Employees also need to be proactive in asserting their rights. When accepting a salaried position, it is important to carefully review the terms of employment. If you are unsure whether your proposed salary covers overtime, make sure to raise that issue before beginning work.
Also, never accept any job where an employer does not provide the state-mandated wage notice at the time of hiring, and wage statements for each pay period thereafter. This is critical documentation that can assist you should a wage hour or overtime dispute arise later. A judge will not necessarily take your word for it that you are owed money without supporting evidence.
If you have any reason to suspect that your employer is violating the law, do not hesitate to contact a qualified New York employment lawyer who can advise you of your rights. Call the Law Offices of Mahir S. Nisar at 800.496.3076 if you need to speak with someone today.