As a business owner, your employees keep the company functioning every day. You do not want to run into trouble because of illegal wage practices. Staying informed on what you are required to pay your employees is crucial to your company’s life and reputation. Here is an overview of the minimum wage and overtime requirements.
For a long time, the federal minimum wage was $7.50. Recently, though, New York has implemented a plan to slowly increase the minimum wage over the next few years to reach $15.00 by 2018. As of right now, the required minimum wage for most New York businesses is $9.70, but it may be different depending on industry, company size and location.
Because the minimum wage is planned for an increase every year, you would be wise to start planning now. This could greatly impact your company’s finances and budgeting. If you look at the wage differences over the next few years and start planning for it in your business behaviors, you could save yourself from financial crisis down the line.
Overtime pay is an area where many business owners get into trouble over misunderstanding the law or missing important details. At its most basic level, overtime law states that companies must pay employees 1.5 times their usual rate of pay for any hours they work after 40 hours in the week.
Example: An employee makes $10 an hour. He worked for 41 hours this week. He receives a normal pay of $10 per hour for the first forty, which adds up to $400. He worked one hour of overtime, so he would receive $15 for that extra hour rather than the usual $10. Overall, he would make $415 for the week.
If your employees are paid on a salary instead of an hourly wage, they should still receive overtime for workweeks that exceed forty hours. Their hourly wage is calculated by dividing the hours they worked for the week over their total earnings.
In New York, overtime pay is only based on long workweeks, not days. If someone works more than eight hours in a day, they are not entitled to overtime pay if their overall hours for the week are still forty or less.
It is important to note: You must adhere to overtime laws even if an employee were willing to agree on waiving overtime pay. You are required to pay them overtime.
A claim against you for illegal wage practices could greatly damage your company and create a complex lawsuit for you to face. If you are in this situation, an attorney skilled in employment law can help you navigate the process and minimize damages to your business.