Labor Law
Determining Overtime Exemptions State Laws May Differ From Federal Standards BY EMILY MIDDLEBROOK
R
ecently, the United States Supreme Court considered a question involving overtime exemptions under the Fair Labor Standard Act (FLSA). In Encino Motorcars, LLC v. Navarro, the nation’s highest court was forced to decide whether automobile service providers are exempt from overtime pay requirements. Under the FLSA, “any salesman, parts man or mechanic primarily engaged in selling or serving automobiles, trucks or farm implements if he is employed by a non-manufacturing establishment primarily engaged in the business of selling such vehicles or implements” is exempt from overtime pay. The court concluded that automobile service providers are salesmen who are “primarily engaged in servicing” cars. Because automobile service providers are more like salesmen, the court held such employees are exempt from overtime pay requirements. While the Supreme Court’s decision in Encino does not directly apply to the dairy industry, it could affect employers in this sector. First, the Supreme Court in Encino rejected a long-standing approach of narrowly interpreting the FLSA. What this means is that, going forward, courts will take a broader look at which employees could be considered overtime exempt under the FLSA. While Encino could mean that employers are more likely to have a favorable ruling on overtime pay requirements in federal court, employers must still comply with state wage and hour overtime laws, which could be more restrictive than the court’s approach in Encino. As such, employers in the dairy industry must be aware that state courts could take a less expansive approach in considering when employees qualify for overtime pay exemptions and must still comply with state law on this issue. Both federal and state laws have certain tests regarding an employee’s salary and job duties in determining whether an employee is exempt from overtime pay. To qualify for overtime exempt status, the United States Department of Labor (USDOL) requires three tests to be met. The first is a salary level test where the employee’s salary must meet a specified amount. On the federal level, the minimum annual salary to 38 • Northeast Dairy Foods Association, Inc.
qualify for exempt status is currently $23,660. New Jersey, New Hampshire, Massachusetts, Vermont and Rhode Island all follow the same salary level threshold established by the USDOL. However, some states in the Northeast have different tests for determining overtime pay exemptions. New York has a higher salary threshold than USDOL regulations in determining whether an employee is exempt from overtime pay.
Outside of New York City, Nassau, Suffolk and Westchester counties
New York
REQUIRES
overtime pay as follows: $780.00 per week ($40,560 annually) as of December 31, 2017 $832.00 per week ($43,264 annually) as of December 31, 2018 $885.00 per week ($46,020 annually) as of December 31, 2019 $937.50 per week ($48,750 annually) as of December 31, 2020