New York Overtime Law - The Complete Guide for 2025

New York employers need to fully understand the requirements regarding New York overtime, in order to avoid legal and financial penalties.

New York Overtime Overview

Under New York Labor Law, employers must not only manage compliance under the Fair Labor Standards Act (FLSA), but the New York Minimum Wage Order as well.

According to New York Overtime Law, employers must typically pay employees 1.5 times the regular rate of pay for all time worked over 40 hours in a work week. Some residential employees and farm employees have special overtime rules.

If an employee’s rate of pay differs at times, then employers must use the average pay rate as the regular rate of pay. 

While some occupations are exempt from overtime requirements under the FLSA, New York overtime may require otherwise.

Employers struggling with controlling overtime costs may want to think about better employee scheduling techniques using an employee scheduler tool.

New York Overtime Compensation & Pay

Employees in New York covered under the state or federal overtime requirements are typically entitled to 1.5 times the regular rate of pay for all hours worked over 40.  

New York Overtime Calculation Example:

40 Regular Hours Worked
X $25.00 Per Hour (Regular Pay Rate)
=$1,000.00 Total Regular Pay

$25.00 Per Hour (Regular Pay Rate)
+ 1 ½ Overtime Premium
=$37.50 Per Hour (Overtime Pay Rate)

10 Overtime Hours
X $37.50 Per Hour (Overtime Pay Rate)
=$375.00 Overtime Pay

$1,000 Regular Pay for Regular Rate Time or "Straight Time"
+ $375.00 Overtime Pay
=$1,375.00

An employee’s regular rate of pay is the normal hourly wage. If an employee’s rate of pay differs at times, then use the average as the regular rate of pay. 

Payments that are not part of an employee’s regular rate of pay include:

• Pay for expenses incurred on the employer's behalf
• Premium payments for overtime work
• True premiums paid for work on Saturdays, Sundays, and holidays
• Discretionary bonuses
• Gifts
• Payments in the nature of gifts on special occasions
• Payments for occasional periods when no work is performed due to vacation, holidays, or illness

Overtime Tax Update from the One Big Beautiful Bill Act

Signed by President Trump on July 4, 2025, the One Big Beautiful Bill Act allows eligible employees to claim a tax deduction on overtime pay required by the FLSA from taxable income. The overtime tax deduction is effective from January 1, 2025 through December 31, 2028.

An employee can deduct an annual maximum amount of $12,500. For employees jointly filing with a spouse, the annual deduction amount is capped at $25,000. If an employee’s modified adjusted gross income (MAGI) exceeds $150,000 ($300,000 for employees filing jointly), the amount allowed to be deducted will be reduced by $100 for each $1,000 earned above the MAGI.

To be eligible for the overtime tax deduction, employees must include a Social Security number on the tax return for the given tax year. If married, the employee must also file jointly to remain eligible. Even if individuals opt for a standard deduction (vs. itemized deductions) on a tax return, the individual is still eligible for the annual maximum deduction for overtime.

Overtime Reporting Requirements

All employers must file information returns to the IRS or Social Security Administration (SSA), as well as deliver the applicable forms, including a W-2, to employees that show the total amount of qualified overtime compensation paid out during the tax year.

New York Overtime Eligibility

New York Overtime covers all individuals that fall under the definition of the word “employee”. An employee is defined as "any individual employed or permitted to work by an employer in any occupation”.

However, neither FLSA requirements nor New York Overtime requirements apply to the following types of workers:

• Executive Employees
• Administrative Employees
• Professional Employees
• Outside Salespeople
• Individuals Working for a Federal, State, or Municipal Government*
• Farm Laborers
• Certain Volunteers, Interns, and Apprentices
• Taxicab drivers
• Members of Religious Orders
• Certain Individuals Working for Religious or Charitable institutions
• Camp Counselors
• Individuals Working for a Fraternity, Sorority, Student or Faculty Association
• Part-time Baby Sitters

Important to note is while overtime requirements do not apply to individuals working for a Federal, State, or Municipal Government, the law does cover:

• Charter schools
• Private schools
• Not-for-profit corporations
• Non-teachers working for school districts

It is also important to understand that employers may decide to pay overtime to exempt employees at his or her own discretion, with the exception of “elective officers and those officers otherwise excluded by law and to any or all public employees under their jurisdiction” under General Municipal Law 90.

Rules for Salaried Employees

Although executive, administrative, and professional employees that also meet the requirements of the Salary Level Test are not covered by overtime requirements, some salaried employees are still entitled to overtime pay for hours worked over 40 hours. The number of hours included in the employee’s regular work week only affects the rate of overtime pay.

Example: An employee may be hired to work a 45-hour workweek (called “straight time”) for a weekly salary of $405. In this instance, the regular rate is obtained by dividing the $405 straight-time salary by 45 hours, resulting in a regular hourly rate of $9.00. The employee’s overtime rate is then calculated as $13.50 per hour ($9.00 straight time hourly rate and $4.50 extra hourly pay) and the employee should get $13.50 for 5 hours a week.

What Are Executive, Administrative, and Professional (EAP) Employees?

Executive, administrative, and professional (EAP) employees are exempt from overtime requirements under New York Overtime law. In order to determine if an employee falls into one of these categories, he or she must meet a salary level test as well as one of the other exemption requirements below for EAP.

On November 15, 2024, the U.S. District Court for the Eastern District of Texas invalidated a U.S. Department of Labor (DOL) regulation that raised the salary threshold for the "white-collar" overtime exemption under the Fair Labor Standards Act (FLSA). This decision applies nationwide, rendering the rule ineffective.

However, the New York salary threshold is still higher than the exempt salary thresholds for FLSA. In New York, to be considered exempt from overtime, an employee must make at least the following:

To learn more about the FLSA, click to access the FLSA Guide here. For more help on classifying employees under FLSA guidelines, click through to see this article. 

Executive Exemption

In order to qualify for an executive exemption, an employee must pass the Salary Level Test as well as:

• Have a primary duty of either:
  
  • Managing a business/company
  • Managing a recognized department or subdivision of a business/company
• Customarily and regularly direct the work of at least two or more other full-time employees
• Have the authority to hire and/or fire other employees
  • If the employee does not have the authority to hire or fire, recommendations hold significant weight
• Can customarily and regularly exercise decision-making authority
• Be paid on a salary basis

If an employee meets the previous three requirements as well as the Salary Level Test, then he or she is considered an Executive Exempt Employee and is not subject to FLSA minimum wage and overtime law.

Administrative Exemption

In order to qualify for an administrative exemption, an employee must pass the Salary Level Test as well as:

• Have a primary duty of office or non-manual work that is directly related to the management or general business operations of either the employer or the employer’s customers 
• Have a primary duty that includes the exercise of discretion and independent judgment in regard to important matters
• Regularly work and assist an employer or an employee in a bona fide executive or administrative position
• Be paid on a salary basis

If an employee meets the previous two requirements as well as the Salary Level Test, then he or she is considered an Administrative Exempt Employee and is not subject to FLSA minimum wage and overtime law.

Professional Exemption

In order to qualify for a professional exemption, an employee must pass the Salary Level Test as well as:

• Have a primary duty of work requiring advanced knowledge
  
  • Defined as work that is predominantly intellectual and requires the consistent exercise of discretion and judgment
  • The advanced knowledge must be in a field of science or learning and must be gained from a prolonged course of specialized intellectual instruction (such as college)

OR

• Have a primary duty of work requiring invention, imagination, originality, or talent in a recognized artistic field (Musicians, Composers, Engineers, etc.)

If an employee meets one of the previous two requirements as well as the Salary Level Test, then he or she is considered a Professional Exempt Employee and is not subject to FLSA minimum wage and overtime law. 

Special Rules for New York Overtime

In New York State, some employees have special overtime requirements that differ from the standard federal regulations.

Residential Employee Overtime Rules

Employees classified as residential employees or “live-in” workers are to be provided one and one-half times his or her regular rate of pay for any hours over 44 hours worked within a payroll week (all hours worked within a 7-day period).

Farm Employee Overtime Rules

In 2019, the New York State Legislature passed the Farm Laborers Fair Labor Practices Act, which includes specific overtime rules. Effective January 1st, 2024, farm workers must be paid for overtime one and one-half times his or her regular rate of pay for any hours over 56 hours worked within a calendar week.

The law includes a schedule that decreases the number of hours required to be paid for overtime every two years beginning on January 1st, 2020. The remaining schedule is as follows:

• January 1st, 2026 - one and a half times his or her regular rate of pay for any hours over 52 hours worked within a calendar week
• January 1st, 2028 - one and a half times his or her regular rate of pay for any hours over 48 hours worked within a calendar week
• January 1st, 2030 - one and a half times his or her regular rate of pay for any hours over 44 hours worked within a calendar week
• January 1st, 2032 - one and a half times his or her regular rate of pay for any hours over 40 hours worked within a calendar week

Get Help With New York Overtime Requirements

To learn more about processing payroll in New York or maintaining compliance with New York overtime requirements, contact a New York Payroll Company.

By leveraging experts for payroll outsourcing, companies can avoid non-compliance fines and potential hefty legal penalties. 

Companies struggling with managing employee overtime may want to consider evaluating their timekeeping system, and start a search for time and attendance software.

Guest Author: Linda Walleshauser

Linda Walleshauser is a senior-level certified human resources professional at HR Services at EBC HR & Payroll Solutions, a leading New York Payroll and HR provider, serving businesses throughout New York State and beyond. Linda has successful experience in leadership roles as a human resources executive, trusted advisor, total rewards manager, and strategic consultant. Linda's expertise also extends to leadership experience in higher education, manufacturing, and healthcare organizations, as well as strategic planning with executive teams in all industries. Everyday, Linda effectively develops and implements HR policies that drive improvement in organizational culture, employee performance, and operating results. Known for her strategic focus in organizational development, benefits and compensation programs, recruitment and retention, contract negotiations, career development, systems management, and retirement programs, Linda is committed to community service through board membership and volunteerism for many non-profit organizations in the Western New York area.