Overtime can be a great thing for employees, but it can turn into a nightmare if an employer does not follow Labor Laws when it comes to overtime pay. Here are the top common overtime mistakes made by employers in New York.

  1. Classifying employees as “exempt” when they are not.

According to NY labor laws, the following employees are considered exempt:

Taxicab drivers, Members of Religious Orders, Certain Individuals Working for Religious or Charitable institutions, Camp Counselors, Individuals Working for a Fraternity, Sorority, Student or Faculty Association, and Part-time Babysitters.

[This is not an exhaustive list, please check with the NY Dept. of Labor website.]

Failure to correctly classify an employee can lead to an unintentional offense against labor laws.

  1. Allowing an employee to forfeit overtime pay.

Whether an employee makes an agreement to work longer hours for no overtime pay has no effect on the law. Employees that work overtime hours are required to receive overtime pay. The NY Labor dept. states that “An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, doesn’t cancel the employer’s obligation to pay overtime to workers for hours that they work.”

  1. Failing to include shift differentials, on-call pay or other “extras” in the overtime pay calculation.

Overtime should include all “bonus” pay you may get, to include performance-based bonuses and prizes awarded by your place of employment. Only including standard hourly pay in calculating overtime pay is in violation of NY Labor Laws.

If you feel you’ve been under-compensated or have not been paid by an employer, please contact us for a free consultation.

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