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How To Avoid Common Wage And Hour Violations

New York employers are responsible for adhering to both state and federal requirements regarding employee scheduling and compensation. Generally speaking, wage and hour violations are likely to cluster around issues of minimum wage requirements or overtime pay calculations, but New York’s “spread of hours” rules can also be a consideration, particularly when they affect the total number of hours worked in a given workweek. Navigating the intersections of overlapping regulatory requirements can pose compliance challenges for many organizations. To get more detailed answers customized to your organization’s needs, consider scheduling a consultation with one of the experienced New York business law attorneys at Schwab & Gasparini. You can reach us at any of our four locations, conveniently located across New York State. Call (315) 422-1333 in Syracuse, (518) 591-4664 in Albany, or (914) 304-4353 in White Plains or Hudson Valley to book your appointment.

What Are Wage and Hour Violations?

Nationally, the United States Department of Labor oversees employers’ compliance with the minimum wage and overtime pay requirements for non-exempt employees established under the Fair Labor Standards Act (FLSA). Many states also maintain their own labor laws and employment regulations covering such matters as the employment of minors or the scheduling and hazard pay requirements for industries that are prominent within those states. Compliance failures with any of these that relate to minimum wage requirements or the calculations of required overtime pay may be considered wage and hour violations.

Federal Wage and Hour Rules: Understanding the FLSA

For most employer compliance purposes, federal wage and hour requirements can be grouped into a few broad categories. Depending on the situation, there may be some overlap between categories, as a violation in one area can sometimes have “spillover” effects in another.

The main categories for most employers to keep an eye on are:

• Minimum wage
• Overtime pay
• Record-keeping
• Employee classification

New York State labor laws intersect with each of these categories at various points. Additionally, some industries are subject to specific exemptions and requirements, so it may be a good idea to discuss your regional and industry-specific concerns with a New York employer compliance attorney from Schwab & Gasparini.

Minimum Wage

As of 2025, the federal minimum wage has been set to $7.25 per hour. That rate has not increased since 2009, according to the United States Department of Labor. The cost of living has continued to rise in the meantime, resulting in a functional decrease in the effective pay per hour that some states, including New York, have tried to address by setting their own minimum wage requirements that are higher than that set by federal law. New York’s minimum wage laws can be especially tricky for employers to navigate because the minimum wage varies by region throughout the state.

The New York State Department of Labor provides a chart many businesses may find helpful. Employers may also wish to consider that, generally speaking, the mandatory New York minimum wage is set by the jurisdiction in which the work activity occurs, along with requirements for “spread of hours” pay. Businesses with locations in more than one area will need to account for variances in both their scheduling and their wage computations. As a general rule, the Wage and Hour Division (WHD) of the United States Department of Labor will typically consider the state-mandated minimum wage, if higher than the federal, in assessing an organization’s compliance with minimum wage requirements.

Overtime Pay

The WHD’s Fact Sheet #23: Overtime Pay Requirements of the FLSA lays out some of the essential elements of federal laws governing overtime pay calculations. In most industries, overtime pay must be applied whenever a non-exempt employee’s total hours worked in a single work week exceed 40. At the federal level, overtime pay must be computed at a rate at least one and a half times (150% of) the employee’s regular rate of pay.

Because minimum wage and overtime pay requirements do often appear together in materials related to compliance assistance, there can sometimes be a misconception that overtime pay calculations depend on minimum wage. In practice, however, neither the local nor the federal minimum wage will have any bearing on an employee’s overtime pay calculations unless the minimum wage happens to be the employee’s regular rate of pay. The required overtime pay computation takes the employee’s regular rate of pay, whatever that may be for a particular employee, as its starting point, and must compensate that employee at no less than 150% of their regular rate for each hour worked beyond 40 in a single work week. The computation is calculated in terms of hourly pay regardless of whether the employee’s compensation is typically calculated on an hourly vs. salaried basis for purposes of payroll accounting.

Employee Classification

The proper classification of workers is associated with compliance obligations across several areas of business management. In relation to potential wage and hour violations, moreover, there are actually two distinct types of worker classification businesses will need to consider:

Employee vs. Independent Contractor

Many businesses regularly work with freelancers, event-specific gig workers, or other contractors hired to complete work of limited duration or scope. While the specifics can differ somewhat depending on the circumstances, in most cases these professional relationships are likely to be governed by the terms of the contract between the parties, rather than by state or federal labor laws. Employees are entitled to numerous protections under the FLSA that do not generally apply to individuals hired as independent contractors, and employers generally have tax and workers’ compensation obligations with respect to their employees that are not imposed by a company’s relationship with an outside contractor. Consequently businesses may sometimes be tempted to misclassify employees as independent contractors, while at the same time federal agencies are commensurately likely to scrutinize these relationships for evidence of tax evasion, wage and hour violations, or failure to maintain appropriate workers’ compensation coverage.

Exempt vs. Non-Exempt

The exempt vs. non-exempt employee distinction tends to have fewer far-reaching consequences outside the area of labor and employment law considerations than does the potential for misclassifying employees as independent contractors. Nevertheless, many common wage and hour violations stem from an initial misclassification of an employee as “exempt” from the worker protections and employer reporting requirements of the FLSA. “Exempt” positions are not subject to the federal requirements either for minimum wage or for overtime pay, although they may sometimes be subject to separate state-level requirements.

There are a number of distinct exemptions related to differing types of work - but importantly, as WHD Fact Sheet #17A explains, an employee’s job title, by itself, never determines the position’s eligibility for exempted status. Each position within the organization must be evaluated strictly in terms of the employee’s compensation and the duties of his or her position in order to avoid possible wage and hour violations, along with the consequences that follow.

Recordkeeping

WHD Fact Sheet #21 outlines basic recordkeeping requirements established under the FLSA. While federal regulations do not specify a particular format in which an employer’s records must be maintained, keeping complete and up-to-date records is critical to compliance with wage and hour laws and may also be important if your organization is ever investigated for potential wage and hour violations.

In addition to basic identification and contact information for each employee, employers are required to keep current, accurate records detailing:

• The hours worked by each employee, each day
• The total hours worked in each workweek
• The compensation schedule for each employee (common options are by project completed, by rate per hour, and in flat fees per week or month)
• A computation of the employee’s regular hourly rate of pay, regardless of how the employee’s compensation is normally calibrated for payroll purposes (the “regular rate” is crucial for overtime pay calculations)
• Any pay added to, or deducted from, an employee’s wages in any pay period
• “Straight-time” pay (that is, pay that is not overtime or part of a bonus or other adjustment) per day or week
• The date of each payment to the employee, and a record of the period covered by that payment
• The total amount paid to the employee for each pay period
• Total overtime earnings (if any) for each workweek

Records kept to comply with these obligations must be maintained for at least two, and in some cases three, years from the date they are first recorded.

Discuss Wage and Hour Compliance With a New York Business Law Attorney

Employers’ obligations with respect to state and federal labor laws can be complex. Accurate recordkeeping and employee classification can facilitate the calculations necessary to ensure compliance with minimum wage and overtime pay requirements, but the various possible exemptions and intersections with location-specific considerations can make staying on top of the regulatory guidance difficult. Wage and hour violations can be costly and time-consuming for organizations at any size or scale, so consider taking proactive steps to discuss your compliance concerns with an experienced New York business law attorney. Call Schwab & Gasparini at any of our four locations to schedule a consultation. The numbers are (914) 304-4353 in Hudson Valley or White Plains, (315) 422-1333 in the Syracuse area, or (518) 591-4664 to reach our office in Albany.

Mon Jun 16 2025, 12:00am