Category: Wage & Hour

Professional Exemption

Professional Exemption – A Quick Guide for New York Employers

Most New York employers are subject to both federal and state minimum wage and overtime requirements. In most cases, this means the employer must pay its employees at least the minimum wage for all hours worked and time-and-a-half for hours over 40 in a week. There are, however, many exceptions to these requirements. This post addresses the professional exemption under both the FLSA and New York law.

(Click here for A Quick Guide of the New York State and federal Administrative exemptions.)

(Click here for A Quick Guide of the New York State and federal Executive exemptions.)

FLSA Professional Exemption

Under the FLSA (the federal minimum wage/overtime law), employees may be exempt as a “professional” if:

  1. They are compensated on a salary or fee basis of at least $684 per week, and;
  2. Their primary duty is performing work that requires either:
    • advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction (“learned professionals”), or
    • invention, imagination, originality or talent in a recognized field of artistic or creative endeavor (“creative professionals”).

The FLSA has a further special exception for certain categories of professional employees. There is no salary requirement for attorneys, medical doctors, and teachers who are working in those capacities.

To qualify for the professional exemption under the FLSA, other employees would have to receive the applicable minimum salary. This includes engineers, architects, and artists, for example.

There is an additional potential FLSA exemption for certain computer employees. Employees performing jobs such as computer programming, software engineering, or systems analysis may be exempt even if they do not qualify for the professional exemption. The computer employee exemption also uniquely has an alternative hourly compensation threshold ($27.63 per hour) rather than only a salary threshold.

New York Professional Exemption

Under New York State law, employees can be exempt from minimum wage and overtime requirements if:

  1. Their primary duties consist of the performance of work that either:
  • 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 general academic instruction, an apprenticeship, or training in routine mental, manual, or physical processes); or
  • is original and creative in character in a recognized field of artistic endeavor (as opposed to work which could be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination or talent of the employee.

AND

2. The employee’s work either involves the consistent exercise of discretion and judgment or is predominately intellectual and varied in character and is of the nature that the work produced cannot be standardized in relation to a given period of time.

Unlike the FLSA, New York law does not have a salary or fee basis requirement for professional employees. However, since most employees are subject to both the FLSA and state law, professional employees other than doctors, lawyers, and teachers may need to receive a minimum salary in order to be fully exempt.

Summary

The professional exemptions only apply to certain employees in recognizable professional fields. Many other employees who probably consider themselves professionals will not qualify. However, such employees may be exempt under another exemption, such as the administrative or executive exemptions.

Of critical note, an employee does not automatically qualify for a professional exemption by having an advanced degree. Rather, the degree must qualify them in a professional field and they must be performing the type of work typical to that profession.

Likewise, though often a critical element, a professional degree is not always necessary for the professional exemption. Extensive experience in a professional field  can establish the expertise necessary in some cases.

Read about the New York State and FLSA Administrative Exemptions here.

Read about the New York State and FLSA Executive Exemptions here.

 

Check out my Employment Law Dictionary here!

Fair Workweek

NYC Dictates “Fair Workweek” for Retail and Fast Food Workers

On May 30, 2017, New York City Mayor Bill de Blasio signed a package of laws collectively referred to as “Fair Workweek” legislation. The laws will take effect on November 26, 2017. As a group, they place considerable restrictions on retail and fast food chains’ scheduling of employees. Giving the timing, this could be an interesting holiday shopping season in the Big Apple.

Some media reports suggest that New York State make take action to trump these NYC laws in whole or part. At this time, however, there is nothing in place that definitely preempts these local laws.

Who’s Affected by the “Fair Workweek” Laws?

Here are several terms describing who is subject to these local laws:

FAST FOOD

“Chain” means a set of establishments that share a common brand or that are characterized by standardized options for decor, marketing, packaging, products and services.

“Fast food employee” means any person employed or permitted to work at or for a fast food establishment by any employer that is located within New York City where such person’s job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning or routine maintenance. The term “fast food employee” does not include any employee who is salaried.

“Fast food employer” means any employer that employs a fast food employee at a fast food establishment.

“Fast food establishment” means any establishment (i) that has as its primary purpose serving food or drink items; (ii) where patrons order or select items and pay before eating and such items may be consumed on the premises, taken out or delivered to the customer’s location; (iii) that offers limited service; (iv) that is part of a chain; and (v) that is one of 30 or more establishments nationally, including (A) an integrated enterprise that owns or operates 30 or more such establishments in the aggregate nationally or (B) an establishment operated pursuant to a franchise where the franchisor and the franchisees of such franchisor own or operate 30 or more such establishments in the aggregate nationally.

RETAIL

“Retail employer” means any employer that employs a retail employee at a retail business.

“Retail business” means any entity with 20 or more employees that is engaged primarily in the sale of consumer goods at one or more stores within the city. For the purposes of this definition, “consumer goods” means products that are primarily for personal, household, or family purposes, including but not limited to appliances, clothing, electronics, groceries, and household items.

“Retail employee” means any employee who is employed by a retail employer.

Fast Food Requirements

Scheduling

Covered employers must provide fast food employees with more advance information about their work schedules. By the first day of work, employers have to give an employee a written work schedule containing regular and on-call shifts. Then, generally, employers must give employees their work schedules at least two weeks in advance. If the employer makes changes with less notice, then it must pay the worker an additional $10 to $75 depending on the amount of notice given.

“Clopening” Shifts

The laws also require that employees have at least 11 hours between shifts. In many cases, this prohibits an employer from having an employee close one day and open the next. This is called “clopening.” However, employees may agree to work such shifts. If an employer requires an employee to work “clopening” shifts without consent, it must pay the employee an additional $100 per instance.

Available Hours

Covered employers must offer available regular and on-call hours to current employees before hiring new employees or subcontractors to perform the work. This does not apply where it would cause the employer to have to pay overtime at time-and-a-half.

Not-for-Profit Contributions

In a unique twist, the laws also require fast food employers, upon employee request, to make deductions from employees’ paychecks and donate the money to a non-profit organization of the employee’s choosing.

Retail Requirements

With respect to retail establishments, a new law bans on-call scheduling in New York City. Specifically, retail employers may not:

  • Schedule an employee for an on-call shift.
  • Cancel an employee’s shift within 72 hours of its scheduled start time.
  • Require an employee to work with less than 72 hours’ notice (without the employee’s consent).
  • Require an employee to call in within 72 hours of the start of the scheduled shift to confirm whether the employee must report to work.

There are some exceptions. Employers may change employees’ schedules with less than 72 hours notice if the employer’s operations cannot otherwise begin.

Retail employers must also provide written work schedules 72 hours in advance of the first shift on the schedule.

Additional “Fair Workweek” Requirements

These laws also include prohibitions on retaliation and notice posting and recordkeeping requirements. (Related: see my earlier post on New York State’s wage notice requirements.)

Beyond the additional compensation due to employees in some situations, the New York City Office of Labor Standards may assess remedies including compensatory damages, rescission of employee discipline, and civil penalties up to $1,000 per violation or $15,000 where an employer engages in a pattern or practice of violations.

What Impact Will NYC’s “Fair Workweek” Laws Have?

These laws significantly restrict employee scheduling by covered retail and fast food employers. New York joins Seattle and San Francisco as the only cities in the U.S. to enact legislation of this kind. If it takes affect in New York City, it will at least impose new administrative work for affected companies.

In some sense, the new requirements may create a Catch-22 for employers. On one hand, fast food chains can’t hire new employees without first offering full time hours to all current workers. On the other hand, they can’t schedule employees on short notice without paying additional compensation. So it may be practically impossible (or very costly) to maintain an appropriately sized workforce.

The law permitting employees to contribute to non-profit organizations through payroll deductions also potentially places considerable burden on fast food employers. Companies may have to direct contributions to any number of organizations. This could include labor unions or others with interests that diverge from or conflict with the employer’s business. This appears to be the first law of its kind across the country. Thus, there is no history to draw from in anticipating the full extent of the possible ramifications.

One possibility is that employers might respond to these new “fair workweek” rules by replacing employees with technological solutions. For example, they could increase reliance on touch screen ordering systems in lieu of counter workers. It does not appear that computers have to receive any advance notice of when they will be working!

Finally, there have been rumors that Governor Cuomo, the New York State Department of Labor, and/or other government forces in Albany are working to undermine, curtail, or otherwise preempt in some respects the effectiveness of these New York City laws. It’s not yet clear whether that is actually taking place or what such measures may look like. Therefore, covered employers should begin to prepare for the planned restrictions beginning just after Thanksgiving 2017!

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