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New York Real Property Owners and Managers: Are You Properly Paying Your Building Superintendents?

In recent years, there has been a significant uptick in wage and hour lawsuits filed by New York building superintendents (“supers”) against their employers – typically real property and building owners and property management companies – for failure to pay minimum wage and overtime compensation. While many property owners and managers may believe they are properly paying their supers under New York law, they might not be in compliance with the federal Fair Labor Standards Act (“FLSA”).

New York state law has long maintained minimum wage and overtime exceptions for residential building superintendents (referred to under New York law as “janitors”). Instead of a minimum hourly wage rate (e.g., $15 per hour), New York supers are subject to a minimum fixed rate based on the number of residential and commercial units in the building that they service. Currently in New York City and Nassau, Suffolk, and Westchester County, New York supers must earn at least $10 per unit in the building per week – for example, a super of a 50 unit building must be paid at least $500 per week ($10 * 50 units) – and employers may cap a super’s pay at $638 per week.

In addition, critically, supers are exempt from New York overtime requirements. Generally, nonexempt employees in New York are entitled to 1.5 times their regular rate of pay for all hours worked in excess of 40 hours in a workweek, but that is not the case for New York supers. As a result, New York employers typically do not have timekeeping systems in place to track all hours worked by the super in a workweek, as they are required to do for other nonexempt employees.

However, while there might be state-specific minimum wage and overtime exemptions in New York for building supers, there are no similar exemptions under federal law, and the U.S. Department of Labor Wage and Hour Division (“WHD”) made that clear in Opinion Letter FLSA 2019-1. The WHD started with the general legal principle that where state and local law differ from the FLSA, employers must comply with both laws and meet the standard of whichever law affords the employee the greatest protection. Accordingly, since the FLSA does not maintain a minimum wage and overtime exception similar to New York law, employers must ensure New York supers are earning minimum wage and paid overtime compensation for all hours worked in excess of 40 in a workweek. The WHD stated that employers cannot rely on the New York exceptions for building supers as a good faith defense for failing to comply with the FLSA.

It comes as no surprise that since the WHD issued this guidance there has been a significant increase in lawsuits being filed by New York building supers in federal court for violations of the FLSA overtime requirements. As a result, it is critical for New York building owners and property managers to track the hours worked by their supers and pay overtime for hours worked over 40 in workweek in order to comply with the FLSA. Considering the difficulty in tracking a super’s work hours, particularly those who live at the building they service, the WHD suggested entering into a “reasonable agreement” with supers to establish which hours they are expected to be working, which will avoid the need for precise time records as long as they generally coincide with the hours set forth in the agreement.

At this time, building owners and property managers should review their pay practices for supers (as well as other employees of their buildings – e.g., porters) to ensure they are paid properly in accordance with both New York and federal law, and work with counsel to develop an agreement with their supers and a system for tracking work hours, which will help to mitigate the risk of costly litigation.

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Employment Notes, a newsletter produced by Tannenbaum Helpern Syracuse & Hirschtritt LLP’s Employment Law practice, provides insights on recent employment caselaw, legislation and other legal developments impacting employer policies, human resource strategies and related best practices. To subscribe to the newsletter, email marketing@thsh.com.

10.31.2022  |  PUBLICATION: Employment Notes  |  TOPICS: Employment, Real Estate  |  INDUSTRIES: Real Estate

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