Understanding Overtime Pay in New York: What Employees Need to Know

By David DeToffol | July 1, 2024

As employment law practitioners, we often encounter confusion surrounding overtime pay regulations in New York State. This article aims to clarify some key points about overtime entitlements under New York law.

The Basics of Overtime in New York

New York State labor law mandates that most employees receive overtime pay at a rate of 1.5 times their regular rate for all hours worked beyond 40 in a workweek. It’s crucial to note that these requirements are in addition to federal standards set by the Fair Labor Standards Act (FLSA).

Some Key Points to Remember

  1. Exemptions: While New York law exempts certain occupations from overtime requirements (e.g., executive, administrative, and professional employees), it’s important to note that some workers exempt under federal law may still be entitled to overtime under state law.
  2. Non-Waivable Right: Employees cannot waive their right to overtime pay, even by agreement with their employer.


Here is An Example:

ABC Restaurant employs Sarah as a server. Sarah typically works 45 hours per week and is paid $15 per hour plus tips. ABC Restaurant has been paying Sarah straight time for all hours worked, arguing that her tips compensate for any overtime.

This practice violates New York overtime law in several ways:

  1. Failure to Pay Overtime: Sarah is entitled to overtime pay (1.5 times her regular rate) for all hours worked over 40 in a week.
  2. Misunderstanding of Tip Credit: While employers can take a tip credit under certain circumstances, this does not negate the requirement to pay overtime.
  3. Incorrect Calculation: Even if ABC Restaurant paid overtime, they must calculate it based on Sarah’s full regular rate (including tips), not just her base hourly rate.

In this scenario, Sarah is owed significant back pay. For each week, she should receive:

  • 40 hours at her regular rate
  • 5 hours at 1.5 times her regular rate (including the value of her average tips)

This example underscores the importance of understanding and complying with overtime laws. Employers who fail to do so may face substantial penalties, including back pay, damages, and legal fees.

Implications for Employers and Employees

Understanding these nuances is crucial for both employers and employees. Employers must ensure compliance with both state and federal overtime laws to avoid potential liability. Employees, on the other hand, should be aware of their rights to ensure they’re receiving fair compensation for their work.

As employment law attorneys, we’ve seen numerous cases where misunderstandings about overtime regulations have led to disputes. It’s always advisable for both parties to seek legal counsel if there’s any uncertainty about overtime entitlements or obligations.

Remember, while this overview provides general guidance, overtime law can be complex and fact-specific. If you have questions about your particular situation, don’t hesitate to consult with a qualified employment law attorney.

Contact DeToffol & Gittleman today to schedule a comprehensive and confidential consultation.

DISCLAIMER: The information provided in this blog post is for informational purposes only and is not intended to be legal advice. Laws vary significantly from one jurisdiction to another, and therefore, the concepts discussed here may not apply universally or to every case. Furthermore, laws, especially in this field, are subject to frequent changes, so there is no guarantee that the information presented is current or up to date at the time of reading.