Whether you are an employer or an employee in New York, it is important to understand the distinction between exempt and non-exempt employees. For employers, treating non-exempt employees as exempt could end up costing thousands of dollars in back pay, liquidated damages, and legal fees. For employees, the distinction between the two impacts your rights under federal and state minimum wage and overtime laws. Non-exempt employees generally must be paid at least the minimum wage for each hour of work and one-and-one-half times their regular rate of pay for each hour in excess of 40 per week. However, as explained below, some employees are exempt from the minimum wage requirement, overtime wage requirement, or both.
It is extremely important for workers to understand the distinction between employees and independent contractors, especially in new industries, like ride-sharing, digital ordering and delivery, and tech startups. This distinction can make a big difference in a company's obligations with regard to wages, benefits, taxes, unemployment insurance, workers' compensation, disability benefits, and other matters.