What is the Executive Employee Exemption to New York Overtime: NYC Wage and Hour Attorney

What is the Executive Employee Exemption to Overtime in New York: New York City Wage and Hour Attorney Explains

Under both federal law and New York law, most employees must receive overtime pay at a rate of one and a half (1.5) times their regular rate for all hours worked over 40 hours in a workweek.  However, there are several exemptions to overtime under New York Labor Law which includes the executive employee exemption.  This is an important exemption because it affects many employees in New York, particularly many people who are working in New York City for some of the nation’s largest companies that are headquartered here.

Here at SAMUEL & STEIN, our wage and hour attorneys understand how the executive employee exemption works and who it should and should not be applied too. This is important for both employers and employees alike to know, because employers could be overpaying some employees while other employees may not be receiving proper compensation.  Read on to learn more and if you are still unsure, do not hesitate to contact us with any questions.

What is the “Executive Employee” Exemption?

Under New York Labor Law s 651, employees who work in a “bona fide executive capacity” are exemption from the overtime pay requirements of New York’s minimum wage act and orders.  In fact, the same is true under the Fair Labor Standards Act which is the federal law governing overtime pay through the United States.  Therefore, because of this exemption any “executive employee” is not automatically entitled to overtime pay under New York labor law.

Who is an “Executive Employee” Under the Labor Law?

The executive employee exemption is broad-sounding and could apply to many individuals.  Under the labor law, to qualify for the executive employee exemption an individual must meet the following criteria:

  • The individual’s “primary duty” consists of the management of the enterprise or business;
  • The individual’s customarily and regularly directs the work of two or more other employees;
  • The individual’s suggestions, recommendations, and opinions as to status changes of other employees (hiring, firing, promotions) have “particular weight”;
  • The individual has authority to hire, fire, or promote other employees;
  • The individual customarily and regularly exercises “discretionary powers”; and
  • The individual is paid on a “salary basis” of not less than $543.75 per week (including of boarding, lodging, or other expenses).

If an employee can satisfy all of these criteria, then the employee will be considered an executive employee and exemption under New York Labor Law s 651 from overtime pay.

Are There Exceptions to the Rule?

There are two types of exceptions to this rule.  The first is where an employee has an employment agreement or is a part of a union which has negotiated overtime pay for executive employees.  This is a separate agreement between the employer and the employee (by and through the union), which creates new rights and obligations which may differ from the default application of the labor law.

The second exception is more of an objection, that the individual actually does not satisfy all of the above rules.  This involves particular argues grounded in legal support which can be difficult to make without an experienced wage and hour attorney.

There may be additional exceptions, but these are the two most common that a person will encounter.

Call Our Experienced NYC Wage and Hour Attorneys at SAMUEL & STEIN To Learn More about the Executive Employee Exemption 

The experienced New York City Wage and Hour attorneys at SAMUEL & STEIN are dedicated to asserting and defending the rights of employers and working people throughout New York and New Jersey.  We have the resources, experience, and knowledge necessary to ensure your legal rights are protected and you are not taken advantage of.  Call us today by dialing (646) 681-4193 or use the convenient “Evaluate Now” box on our webpage.  Together we can help answer your questions and protect your rights.

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