Know Your State’s Wage and Hour Laws

Steven Cesare, Ph.D.

A business owner from New York called me the other day to talk about various wage and hour issues including minimum wage, meal periods, and overtime. I’m glad he called me.

During our conversation, the owner told me that on some workdays, his non-exempt employees do not take their legally-required meal period, and he admitted full knowledge of this practice. Though incredulous to my point, I repeatedly informed the owner that meal periods are typically mandated by state law (not in all states, though definitely in New York) and that non-compliance can lead to significant fines and penalties compounded by the number of employees affected and the number of missed meal periods accumulated over multiple years. I admonished the owner that he should document all non-exempt employee meal periods each workday and that this information should be captured on each non-exempt employee’s timesheet. Without that timesheet documentation, the owner would be significantly vulnerable to dramatic wage and hour fines.

It gets better.

Beyond the common practice of not allowing non-exempt employees to take their legally-required meal periods each workday, the owner then revealed that he pays his non-exempt employees in cash for all overtime hours worked. Stunned, I asked him why he was doing that. He sincerely told me that he was doing that because he was told it was legal to do so, as long as the non-exempt employees received the correct overtime rate. Still stunned, I informed the owner of this potentially illegal action and suggested that he procure EPLI insurance today, and contact his Accountant immediately to remedy this situation.

But wait, there’s more.

Within our discussion of overtime, the owner informed me that he consistently paid his non-exempt employees an overtime rate of double time when they worked on Sundays or on a holiday. Stunned, I asked him why he was doing that. He sincerely told me that he was doing that because he was told that New York state law required such payment. In response, I clarified the rules of receiving overtime in New York (i.e., time and a half payment for each hour beyond 40 hours worked in a workweek) and told him the state of New York does not require him to pay his non-exempt employees double time on a Sunday or company-observed holiday.

Though skeptical of the information I conveyed to him, I simply suggested that he share these points with his trusted Accountant to validate his awareness of New York wage and hour laws, remedy past errors, and modify his pay practices going forward.

If you have any questions or comments about this topic or anything else related to human resources, simply call me at (760) 685-3800.