Business Owner's Manual

Wages & Payroll

Below are some of the key issues involved in paying your employees. You can learn more about these issues and download facts sheets and required notices from the Employment Standards Administration at the U.S. Department of Labor site.

• Minimum Wage. You must pay the federal rate unless your business is exempt from the requirements of federal law. Minimum wage rates must be posted.
  
  
• Overtime Pay. Employers generally must pay all "non-exempt" employees overtime pay (time and one-half) for all hours actually worked over 40 in the work week. For this purpose, lunch breaks, paid sick-days, holidays, vacations, and other time off are not considered hours worked unless the employer has a different policy.
  
  

  Note: The following classifications of employees are "exempt," provided they are paid on a salary basis: bona fide executive, administrative and professional employees, outside salespersons, and certain computer-related employees (e.g., systems analysts, programmers, software engineers). More information is available by calling the Department of Labor, Wage, and Hour Division at 212-264-8185.
  
  

• Pay Schedule. New York labor law generally requires that employees be paid regularly and no less frequently than semi-monthly. Certain classifications of employees, however, must be paid more frequently. A "profit-making" business, for example, must pay manual workers on a weekly basis, unless otherwise authorized by the Commissioner of Labor.
  
  
• Withholding. Businesses that pay wages to "employees" are required to withhold a percentage of those wages and deposit them periodically with the government. As a result, employers must obtain a Federal Tax ID Number. See Tax planning for more information.
  
  
• Deductions from pay. Generally, New York employers are prohibited from making pay deductions for things such as brokerage or cashier's cash shortages. Even when deductions are permissible, they can be subject to garnishment laws prohibiting deducting more than ten percent of an employee's wages.

SOURCES:   Prepared with the assistance of Benetar, Bernstein, Schair & Stein, New York, NY