New York’s “Extra Pay” Requirements for Non-Exempt Employees
Have you heard of “spread of hours” pay, “split shift” pay, and “call-in” pay? Don’t be surprised if you haven’t. New York has three extra pay requirements that aren’t found in the New York Labor Law, but rather in industry-specific wage orders promulgated by the Commissioner of Labor. The result is that some of the most seasoned employers are not aware of these requirements. Read on to learn more.
Spread of Hours
“Spread of hours” pay is unique to New York. It is an extra hour of pay at the minimum wage rate that must be paid to certain non-exempt employees (i.e., employees who must be paid overtime wages) when the interval between the beginning and end of an employee’s workday (the so-called “spread”) exceeds 10 hours. The additional hour of pay is not payment for work performed and need not be factored in when calculating overtime pay. The spread includes working time plus time off for meals and any off-duty time, the result of which is that an employee working 10 hours or less on a particular workday may still be entitled to an extra hour of spread of hours pay.
Consider the following scenarios:
- An employee works 7:00 am to 10:00 am, then again from 7:00 pm to 10:00 pm in the same workday. The employee has worked 6 hours over a 15-hour spread.
- An employee works from 11:30 am to 3:00 pm, then again from 4:00 pm to 10:00 pm in the same workday. The employee has worked 9.5 hours over a 10.5-hour spread.
- An employee works from 7:00 am to 5:30 pm, with two unpaid 30-minute meal breaks. The employee has worked 9.5 hours over a 10.5-hour spread.
In each of the scenarios above, the employees work less than 10 hours, but over a spread that exceeds 10 hours.
Spread of hours pay is required:
- In the hospitality industry (which includes hotels, restaurants and bars);
- In all other industries, except for the building service and farming industries; and
- By all non-profit organizations, except for those non-profits that are exempt from wage order coverage under New York Labor Law § 652(3).
It’s important for hospitality industry employers to note that since spread of hours pay is at the full minimum wage rate, they may not apply any credits/allowances – such as those for tips, meals, and lodging – to the spread of hours payment.
The same industries and sectors that require spread of hours pay also require an extra hour of pay at the full minimum wage rate when certain non-exempt employees work a “split shift.” A split shift is a schedule of daily hours in which the working hours required or permitted are not consecutive. (A meal period of one hour or less is not considered a break in consecutive hours.)
Consider the same scenarios outlined above, which all had a spread that exceeded 10 hours:
- An employee works 7:00 am to 10:00 am, then again from 7:00 pm to 10:00 pm in the same workday. The employee has worked a 15-hour spread as well as a split shift.
- An employee works from 11:30 am to 3:00 pm, then again from 4:00 pm to 10:00 pm in the same workday. The employee has worked a 10.5-hour spread as well as a split shift.
- An employee works from 7:00 am to 5:30 pm, with two unpaid 30-minute meal breaks. The employee has worked a 10.5-hour spread, but there is no split shift because the employee worked consecutive hours.
When the spread exceeds 10 hours and there is a split shift, employees are only due one additional hour of pay (as opposed to two hours) as spread of hours / split shift pay.
There is no provision for split shift pay in the hospitality industry wage order. This means that, while there is a considerable potential for overlap between an employee’s spread of hours and his/her work under a split shift, hospitality industry employers are not required to pay employees an extra hour of pay at the full minimum wage in situations where there is only a split shift, but spread of hours does not exceed 10.
New York also requires “call-in” pay when a non-exempt employee reports to work and is sent home early by the employer. With the exception of the hospitality industry, in the industries and sectors discussed above, the amount of call-in pay is the lesser of 4 hours or the length of the regularly scheduled shift at the minimum wage.
In the hospitality industry, the amount of call-in pay is:
- The lesser of 3 hours for one shift or the length of the regularly scheduled shift;
- The lesser of 6 hours for two shifts totaling 6 hours or less or the number of hours in the regularly scheduled shifts; and
- The lesser of 8 hours for three shifts totaling 8 hours or less or the number of hours in the regularly scheduled shifts.
Where call-in pay is required in the hospitality industry, it must be paid at the “applicable wage rate,” which is:
- payment for time of actual attendance calculated at the employee’s regular or overtime rate of pay, whichever is applicable, minus any customary and usual tip credit; and
- payment for the balance of the period calculated at the basic minimum hourly rate with no tip credit subtracted.
For example, if a tipped employee at a NYC large employer works one hour at $8.65/hour (which is the current cash wage for tipped employee at a NYC large employer) of a single shift and then is sent home, the employee would be paid for one hour at $8.65/hour and two additional hours at $13.00/hour (which is the current basic minimum hourly rate) for a total of $34.65 as call-in pay.
Similar to spread of hours pay, no credits/allowances may be applied to hospitality industry call-in pay.
Depending on the employer’s industry and sector, extra pay may not be due in all cases. This is because many workers’ eligibility for extra pay is determined by a formula that calculates how much more they earn above the minimum wage.
With the exception of the hospitality industry, the New York Department of Labor and most (but not all) New York courts have taken the position that if the amount paid to the employee for the workweek already exceeds the minimum wage and overtime rate for the number of hours worked and any extra pay owed, no additional payment is required during that workweek. In the hospitality industry, however, spread of hours and call-in pay must be paid to employees regardless of how much the employee makes.October 16, 2018 | New York, Pay, Split Shifts, Spread of Hours, Wage and Hour