Business owners—especially small business owners—often try to come up with creative payment schemes for their employees. While owners may make it seem like such payment arrangements are in the employee’s best interest, these arrangements often violate New York City wage laws and may deny an employee important wages that they deserve under state law.
For example, imagine that an owner of a small restaurant offers to pay an employee a flat fee of $600 per week. This guarantee may seem attractive to the employee because it’s more than the required hourly wages under New York hospitality wage laws. However, employees may not realize that this arrangement can deny them money they deserve.
A standard workweek is 40 hours per week under federal and state labor laws. Therefore, a flat payment would constitute compensation for that standard workweek. The problem here is that most restaurant workers work more than 40 hours per week. In such cases, the law would entitle them to overtime payments for any hours worked beyond 40 in a week.
A simple calculation illustrates how much money is owed. The regular rate is determined by dividing the flat rate by 40 hours in accordance with the New York Hospitality Industry Wage Order. Accordingly:
- $600 for a 40-hour week equals an hourly rate of $15 per hour
- Overtime payments at this rate would equal $22.50 per hour (i.e., one-and-one-half times the regular rate)
- If you work 50 hours per week at the $600 rate, you would be entitled to $225 per week in overtime payments
- For one year, that adds up to $11,700 in unpaid overtime wages
As you can see, unpaid overtime can add up quickly. What seemed like a favorable arrangement for you is actually favoring your employer and denying you payments that you rightfully deserve.
If your employer offers you a unique payment arrangement, knowing whether it is in your best interests can present a challenge. Never hesitate to discuss your rights with a New York City wage and hour lawyer before agreeing to anything.
Discuss Your Wages With an Experienced New York City Labor Law Attorney Today
Braverman Law PC regularly represents the rights of employees throughout New York City. If you have any concerns about minimum wage, overtime, or other payments by your employer, please contact our office to discuss your situation. Call (212) 206-8166 or contact us online today to set up a free consultation.