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How May My Business In Manhattan, NY Avoid Lawsuits By Its Workers For Unpaid Wages?

  • By: David Rich
  • Published: February 12, 2019
How May My Business In Manhattan, NY Avoid Lawsuits By Its Workers For Unpaid Wages?

Your company in Manhattan, NY, in paying wages to its employees, must comply with both New York State and federal wage-and-hour laws. Your business’s wage-and-hour practices are financially important. Your company’s compliance with state and federal wage-and-hour laws in compensating employees is particularly monetarily significant with regard to employee classification, including:

  • Exempt versus non-exempt status for purposes of eligibility for overtime pay; and
  • Employee versus independent contractor status

Your business in Manhattan must enhance its wage-and-hour practices in a manner that is likely to lessen the risk of lawsuits for unpaid wages. So, too, your company in Manhattan must shore up its wage-and-hour practices in way that is likely to increase your company’s chances of successfully defending any unpaid wages lawsuits.

What Are Lawsuits for Unpaid Wages?

Lawsuits for unpaid wages are lawsuits, collective actions, or class actions by one or more employees alleging, among other things, that the employer has failed to pay, to the workers, agreed-upon wages, or that the employer has failed to pay, to the employees, overtime pay or the minimum wage.

The federal Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (the “FLSA”), and its implementing regulations, 29 C.F.R. §§ 510 et seq., require that most employees in the United States be paid at least the federal minimum wage of $7.25 per hour for all hours worked and overtime pay at 1½ times the regular rate of pay for all hours worked in excess of 40 hours in a workweek.

The New York State Minimum Wage Act, N.Y. Labor Law § 650 et seq., requires that employees in Manhattan be paid at least the Manhattan minimum wage — which, depending on the county and the size of the employer, ranges from $11.10 per hour to $15.00 per hour — for all hours worked. Covered employees who work overtime must be paid at a rate that is 1½ times their regular, “straight-time” hourly rate of pay.

For non-residential employees in Manhattan, this overtime rate applies to all time in excess of 40 hours in a payroll week.

For residential employees (that is, live-in workers), this overtime rate applies to all time in excess of 44 hours in a payroll week.

Below, I outline some best practices for employers for avoiding wage-and-hour claims.

Perform a compliance audit

Perform a compliance audit of your company. Among the issues to be examined in a compliance audit are the following:

  • Who is the employer?
  • Is there an employment relationship?

In order for the FLSA or, in most respects, the New York Labor Law (the “NYLL”) to apply, there must be an employment relationship between the “employer” and the “employee”.

To employ includes to suffer or to permit to work.

This definition of employ is very broad, with the result that an employment relationship is easily created.

The FLSA does not protect independent contractors. Similarly, the NYLL does not require businesses to pay, to independent contractors, overtime compensation or the minimum wage.

However, in Manhattan, the New York Freelance Isn’t Free Act, Local Law 140 of 2016 (the “NYCFIFA,” the “Freelance Isn’t Free Act”), N.Y.C. Admin. Code §§ 20-927 – 20-936, greatly strengthens the rights and remedies of independent contractors.

  • Is the activity at issue work? Work not requested but suffered or permitted is work time. For each one of the following activities by employees, a different set of criteria determines the circumstances under which the activity constitutes hours worked:
    • Waiting Time
    • On-Call Time
    • Meal and Rest Periods
    • Training Time
    • Travel Time
    • Sleep Time
  • What are the minimum wage obligations?
  • Where a credit is taken for tips, is that taking of credit lawful?
  • What is the overtime obligation?
  • Is the employee exempt from the receipt of the minimum wage?
  • Is the employee exempt from the receipt of overtime?

The FLSA sets forth exemptions from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. The FLSA also exempts certain computer employees. In general, to qualify for exemption, workers must satisfy certain tests concerning their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not decide exempt status. For an exemption to apply, a worker’s specific job responsibilities and salary must satisfy all the requisites of the U.S. Department of Labor’s regulations.

Manhattan follows the FLSA’s above-mentioned exemptions, for bona fide professional and outside sales employees, from overtime pay. However, Manhattan requires that professional and outside sales employees be paid at least 1½ times the Manhattan minimum wage for their overtime hours.

Manhattan follows the job duties tests of the FLSA’s above-mentioned exemptions, for bona fide executive and administrative employees, from overtime pay. However, in Manhattan, to qualify for exemption, executive and administrative employees must be paid on a salary basis and at a salary level which, depending on the county and the size of the employer, ranges from $832 per week to $1,125 per week.

Further, Manhattan requires that executive and administrative employees be paid at least 1½ times the Manhattan minimum wage for their overtime hours.

  • Are all required records being kept?

New York State, like the federal government, does not require any particular order or form of records that an employer must maintain regarding employees’ wages and hours.

That said, Manhattan requires employers in the Empire State to establish, maintain and preserve for not less than six years contemporaneous, true and accurate payroll records. These payroll records must contain “for each employee,” among other information:

  • “[F]or each week worked the hours worked”;
  • The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other basis;
  • Gross wages;
  • Deductions;
  • Allowances, if any, claimed as part of the minimum wage; and
  • Net wages.

For a detailed discussion of what payroll records your business in Manhattan must keep, see my March 12, 2012 blog post.

Call a Manhattan, NYC Unpaid Wages Lawyer

Call the Law Offices of David S. Rich, LLC at (347) 970-5550 to speak with a knowledgeable labor and employment lawyer about ensuring that your company complies with overtime pay and minimum wage laws and other wage and hour laws, or to retain a skilled unpaid wages attorney to defend your company in unpaid wages lawsuits or other wage and hour litigation.

David Rich, Esq.

David Rich David S. Rich is the founding member of the Law Offices of David S. Rich, LLC,
a Manhattan Employment and Business Litigation Law Firm, in New
York City and in Englewood Cliffs, New Jersey...View Profile