New York Non-Exempt Employee Rules

The New York Labor Commissioner recently issued a ruling that non-exempt employees must be paid an hourly rate. This law is in contrast to the federal FLSA and most state laws, which permit an employer to pay any worker (exempt or non-exempt) by salary, as long as applicable minimum wage and overtime laws are followed. It applies to almost every employer in New York.

Although this new ruling has not yet gone into effect, every New York employer should be aware of it. As soon as the Labor Commissioner finalizes regulations, they will be published in 10 New York newspapers. Thirty days after publication, the new rules will go into effect.

When that happens, only exempt employees can be paid on a salaried basis under New York law. Because the Labor Commissioner has not yet issued guidelines, the implementation of this ruling is not clear. As soon as the guidelines are clarified, they will be covered here.

This change came about after a five-month study of New York minimum wage laws by the New York Wage Board. The study was requested by the New York Labor Commissioner.

In addition, the report issued by the Labor Commissioner had additional new regulations in it. Among them is a ruling that in certain industries, the employer must pay workers a premium of an extra hour’s pay for any workday that exceeds 10 hours. The changes have the most impact on restaurant and hotel employers in New York state, including New York City.

In the past, employers could take a set-off against this fee if the employee averaged more than the minimum wage. However, that set-off has been eliminated. Under the new regulations, when an employee works a shift of 10 hours or more, he or she is entitled to an additional hour of pay. An employee who works 10 hours must be paid for 11 hours. An employee who works 12 hours must be paid for 13 hours, at the employee’s average rate. Overtime premiums still apply. However, this “spread of hours” bonus pay need not be calculated in figuring overtime.