Both the federal and state wage and hour division have laws that many employers don’t know about because the circumstances surrounding those laws are not an every-day occurrence for many. This article will discuss one of the New York laws and how it might apply to hourly employees of your business. It does not apply to exempt employees.
- If an employee’s “spread of hours” exceeds 10 hours on any given day, the employee must be given one hour’s pay at the basic minimum wage.
- The spread of hours is the interval between the beginning and end of an employee’s workday. It includes all time worked plus time off for meals and/or intervals off duty. A simple way to calculate that 10 hours is to state what time the employee started working that day, and when did they last stop working at the end of the day. For example, if the employee signed in at 9:00 am and worked until 8:00 pm, and they had a 1-hour unpaid lunch, this spans an 11-hour period, so the spread of hours is over 10.
- Under the above mentioned example, the employee must be paid at least minimum wage for the 10 hours they actually worked, plus one additional hour (total of 11 hours).
- So if we take the 11 hours x $9.00 (minimum wage), we have a gross of $99. That means the employee has to be paid at least $99 gross for that day.
- Let’s suppose the employee’s actual rate of pay is $9.50 per hour. If we take the actual hours worked (10) x $9.50 we get $95. You can see they have not received the $99 gross they are supposed to be paid for that day, so the employer has to pay them an additional $4.
- This can be confusing because the law says they must be given one hour’s pay at the basic minimum wage ($9.00) and we are only giving them $4 “extra”. However, the intent of the law is not to give a whole hour, but to ensure their daily gross is as explained in #3 above.
- Let’s supposed the employee’s actual rate of pay is $10.50. If we take the 10 hours they work x that rate, we get $105. No additional monies are owed because they have received more than the $99 mentioned in #3 above.
- If an employee has a split shift, they need to receive one hour’s pay at the basic minimum hourly wage rate.
- A split shift is any daily schedule where all the hours worked are not consecutive. If they have a meal period of one hour or less, it is not considered to be part of a split shift.
- The same daily pay theory applies to split shift as it does to the spread of hours in #1 above.
It's simple, but complicated at the same time. My suggestion is that you do a self-audit to see if the above applies to you. The above are topics that the DOL would uncover in an audit, so it is in your best interest to correct it before they do. Happy auditing!