Beginning on January 1, 2020, farm employees in New York will no longer be exempt from overtime pay. A new law passed by the state will require that farm employers pay overtime (1.5 times the regular rate of pay) to eligible farm employees for hours worked over 60 in a week (except for immediate family members). This requirement will encourage employers to adopt strategies that minimize paying overtime. One strategy that employers are considering is moving employees to salary pay, but the answer is not quite that simple…
Myth: “Employees paid on salary don’t have to be paid for overtime, they can work until the job is done.” This is a popular myth but it’s just not true. An employer can choose to pay a farm employee by salary (which means a regular, pre-determined amount of pay not directly based on hours), but the employer may still be required to pay at least the minimum wage, to pay weekly, to keep track of hours worked, and to pay overtime above 60 hours/week. Simply paying by salary has little to do with whether or not overtime pay is required. The need to pay overtime depends on whether or not an employee is “exempt” or “not exempt” from the overtime law provisions.
Farm employees will no longer be exempt as an entirety, but both New York and federal law identifies several other types of employees who may be employed on farms and may be “exempt” from overtime. The federal Fair Labor Standards Act (FLSA) provides these exemptions for specific types of employees and the federal guidelines are generally followed by New York. The types of exempt employees who might possibly be employed on a farm include: executive, administrative, professional and outside sales employees. For a farm employee to be classified into one of these overtime “exempt” positions, they must meet all of a number of “tests” about the nature of the job.
Executive
Some farm managers may fit into this description, especially if they are truly supervising two or more other employees.
- The Employee’s primary duty consists of the management of the enterprise.
- The Employee customarily and regularly directs the work of two or more other employees.
- The Employee has the authority to hire or fire other employees.
- The Employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees have particular weight.
- The Employee customarily and regularly exercises discretionary powers.
- The Employee is paid on a salary basis, inclusive of board, lodging, and allowances.
Administrative
Some farm office employees may meet all of these tests, especially if they have specialized training or knowledge and exercise their own discretion.
- The Employee’s primary duty consists of the performance of office or non-manual field work directly related to management policies or general operations.
- The Employee customarily and regularly exercises discretion and independent judgment.
- The Employee regularly and directly assists an employer, or an employee employed in a bona fide executive or administrative capacity or who performs under general supervision, work along specialized or technical lines requiring special training, experience or knowledge.
- The Employee is paid for their services on a salary basis, inclusive of board, lodging, and allowances.
Professional
This possible category might include highly educated professionals such as a veterinarian who is employed by a farm. For the professional exemption to apply, the job must meet both a primary duty and a nature of the work test.
First, the employee’s primary duty consists of the performance of work that:
- Requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from: a general academic education, an apprenticeship, or training in the performance of routine mental, manual, or physical processes.
-or- - Is original and creative in a recognized field of artistic endeavor, and produces a result that depends primarily on the invention, imagination, or talent of the employee.
Second, the employee’s work:
- Requires the consistent exercise of discretion and judgment in its performance.
- Is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical or physical work).
- Is of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.
Salary Minimum Wage
In addition to the tests required to qualify a job as overtime exempt, salaried positions must also meet New York’s minimum wage requirements (see page 3 of the linked document for weekly salary for executive and administrative positions). Weekly salary minimums for upcoming years are:
- For most of upstate: $885.00 per week on and after December 31, 2019; $937.50 per week on and after December 31, 2020.
- For Nassau, Suffolk and Westchester counties: $975.00 per week on and after December 31, 2019; $1,050.00 per week on and after December 31, 2020; $1,125.00 per week on and after December 31, 2021;
The New York State Depart of Labor provides an FAQ document that defines these types of employees in more detail. Farms should make sure that employees they want to classify as “exempt” from overtime have an updated job description and real duties that meet one of the categories above.
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By Richard Stup, Cornell University. Permission granted to repost, quote, and reprint with author attribution.
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