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Legal Guidelines for Paying Remote Workers In New York

Remote worker in New York completes assignments.

According to the NYS Society of CPAs, about 13% of workers in New York are now fully remote. This number has fluctuated wildly over the past few years with the onset and fading of the COVID-19 pandemic. Prior to the pandemic, only 6% of American workers worked in a fully remote setting. During the pandemic, that number skyrocketed to almost 40% – and now it seems to have stabilized at its current levels. One thing is clear: There are more remote workers in New York than ever before, and companies may need to adjust accordingly. This is particularly true in the context of paying remote workers. To learn more about the legal requirements for paying remote workers, consider a consultation with an experienced business litigation lawyer in New York – such as Schwab & Gasparini. Call our Syracuse office at (315) 422-1333, our Albany office at (518) 591-4664, our White Plains office at (914) 304-4353, or our Hudson Valley (914) 304-4353.

Do You Have to Pay Remote Workers Overtime in New York?

Non-exempt remote workers are entitled to overtime payment in the same way as other workers in New York. The Fair Labor Standards Act states that if a worker completes more than 40 hours of work within a single week, they must receive overtime pay for any additional hours. This calculation begins again at the start of each work week. Overtime pay for remote workers is “time and a half,” or 1.5 times the normal wage. For example, a remote content manager might work 42 hours in a single week with an hourly wage of $20 – earning $30 per hour for the last two hours.

How to Calculate Hours for Remote Workers in New York

While overtime requirements remain unchanged for remote workers, calculating their hours may be more challenging for employers. This is because a remote worker does not “clock in” and “clock out” in the same way as a traditional employee. One of the most attractive aspects of working remotely is the freedom to set a customized schedule. Many workers abruptly halt in the middle of the day to walk their dogs, visit coffee shops, or run personal errands. Generally speaking, the employer bears the responsibility of tracking hours for remote work. Many New York employers are encountering this issue for the first time, and various time-tracking apps have become popular within the past few years.

Tracking and calculating hours for remote work is important for various reasons. Perhaps most importantly, companies should accurately track hours to limit unnecessary payroll costs. According to the Bureau of Labor Statistics, wages represent over 60% of total costs for many American businesses. Companies commonly pay 70% of total expenses to payroll, representing the greatest single cost for many businesses. Fortune 500 companies would lose billions if they failed to track even relatively short periods of unproductivity among their remote workers. Aside from these costs, tracking hours is also crucial from a legal perspective. With clear and accurate documentation of hours worked, companies can respond to wage disputes in New York with greater efficacy.

What Is a “Non-Exempt” Worker in New York?

Overtime, record-keeping, and tracking requirements only apply to non-exempt workers in New York. Most “employees” are not exempt from these requirements, and companies should carefully consider the status of their workers before developing payment systems and policies. Freelancers and independent contractors are generally exempt, and these professionals commonly operate as remote workers. Companies may not need to track the hours of these individuals, and they may not need to compensate them additional sums for overtime hours.

Many freelancers do not receive hourly wages. Instead, they often receive compensation for each completed assignment or project. For example, a freelance writer might receive $7 per 100 words. A graphic designer might negotiate a sum of $500 for a logo or book cover. No overtime payment is necessary, and payment calculations may be easier under this “per-piece” system. That being said, it is very easy to “misclassify” an independent contractor. Instead of simply assuming that a worker falls into a certain category, a company may wish to consult with an experienced employer defense lawyer in New York before making any payments. Schwab & Gasparini may be able to help companies determine whether a worker should be classified as an independent contractor or employee.

What if My Remote Worker Lives in a Different State?

The cost of living in New York State is much higher than the national average, and many workers may relocate to more affordable areas after their employers allow them to work from home. Companies in New York should understand the legal implications of these relocations, and they may need to learn about labor laws in different States to ensure compliance. These include not only overtime laws, but also regulations regarding paid leave, minimum wage, and much more.

The opposite is also true, and companies outside of New York State must adhere to New York labor laws when paying remote workers operating within the Empire State. For example, a tech worker in California might relocate to New York and complete assignments remotely. In this situation, the California-based employer would need to familiarize themselves with New York employment laws – including those related to overtime and minimum wage. These out-of-state employers may wish to contact a New York-based lawyer for more accurate guidance – and not a business attorney in their own home state.

Legal Requirements for Paying Hybrid Workers in New York

The Fair Labor Standards Act applies regardless of where the employee works, and it does not matter whether a non-exempt worker splits their time between the company office and their home workspace. Regardless of their schedule, they should receive 1.5 times their normal pay for any hours beyond 40 per week.

Contact Schwab & Gasparini

Remote work offers numerous potential benefits to both employers and employees in New York. To take full advantage of these benefits while minimizing potential issues, companies may wish to consider the various legal implications of such an arrangement. Of course, each company is different – and these legal implications may vary depending on the unique aspects of each employer-employee relationship. Basic online research cannot deliver targeted legal guidance based on these varying factors, and a New York employer defense lawyer may provide more detailed information on paying remote workers, calculating hours, and other important subjects. To continue this discussion, consider contacting Schwab & Gasparini. Call our Syracuse office at (315) 422-1333, our Albany office at (518) 591-4664, our White Plains office at (914) 304-4353, or our Hudson Valley (914) 304-4353.

Mon Sep 16 2024, 12:00am