NH Employment Law Overview
Labor laws in New Hampshire are important as they set parameters for the working terms and conditions for employees. Many terms and conditions relating to termination of employment for both hourly and salaried employees are governed by these laws. In the event of an employment dispute between a current or a former employee, the Governor’s Office for Family Assistance will refer the disputing parties to the Department of Labor for resolution. The Department of Labor was established, in part, to resolve such employment disputes.
New Hampshire, like many states, has a long history of helping ensure fair and equitable treatment of employees through its labor laws. The New Hampshire Department of Labor came into being 99 years ago as a response to the labor conflicts and potential violence within the state that stemmed from the poorly constructed and unsafe conditions of labor in the Granite State’s textile mills. As nighttime fires erupted, taking lives and choking the air with fumes, Anson Burlingame, United States Senator from New Hampshire, pushed for an investigation of the unsafe conditions. Such an investigation led to the establishment of the State Board of Labor in 1913, as well as the first inspectors to stem the loss of life and ensure the safety and rights of workers . Anson Burlingame is not alone among New Hampshire’s politicians to have found himself on the wrong end of the smartphone video to go viral on social media.
In 1969, with massive strikes and riots nationwide, the State Board of Labor eventually morphed into today’s New Hampshire Department of Labor under then Governor Mel Thomson. Then, within five years, the Department developed into the New Hampshire Department of Labor and Training, with later iterations dropping "and Training" to simply be known as the New Hampshire Department of Labor. Now it is known as the New Hampshire Department of Labor, but the historical legacy of the board is alive and well.
The Department is overseen by the New Hampshire Labor Commissioner. A key job of the Commissioner is to work with business and industry in the state to help ensure that New Hampshire’s workers enjoy the highest degree of job protection and job training to help put men and women to work. However, it is also responsible for ensuring that New Hampshire businesses have a proper balance of regulation and assistance. As the government agency charged with implementing the state’s labor laws and with enforcement of those laws, the Department serves as a taxpayer funded labor law attorney for employees.
Who is a Salaried Worker?
Defining a salary employee under the NH Dept. of Labor regulations is not as easy as some may think. As discussed above, one reference point for classifying a position as exempt is the territory-wide average salary per annum of the top earning 10%, as obtained from the NH Employment Security Labor Market Information Bureau. If the annual salary is below this level, the position is likely non-exempt (unless it falls into another deduction category), while any position paying this salary level or above is likely exempt. A separate analysis may be required to determine whether the particular position falls into a professional, administrative or executive exemption category, requirements for which are not as easily determined by looking at the salary period. Another bright line test is provided under the FLSA as to the minimum salary level that must be paid for an employee to be considered exempt. That level is currently $455/week, and will be increasing to $684/week effective Jan. 1, 2020. In either case, an employee making below the $455 or $684 minimum cannot be classified as exempt regardless of whether the employee meets any particular duties test in his/her position and will be entitled to overtime for all hours worked over 40/week on a non-exempt basis. Again, employers are reminded, however, that the NH DOL standards are always more favorable to the employee. The general duties tests for salary employees are as follows: Whether or not an employee is classified as exempt is determined on an individual basis. An employee may be exempt even if the employer fails to structure the position to fit within the definition. On the other hand, simply because the salary meets the threshold does not necessarily mean that the employee is exempt, as the employer has the obligation to ensure that the position meets both the salary and the duty standards. If both standards are not met, then the employee is entitled to overtime pay for non-exempt time worked in excess of 40 hours in a given seven-day period of time, on the basis of time-and-a-half the regular hourly wage of that employee.
Minimum Wage & Salary Exemptions
According to the New Hampshire state website: in New Hampshire, the minimum wage is currently $7.25 per hour. Currently, federal minimum wage is also $7.25 per hour for all workers under the Fair Labor Standards Act so that individual states must follow federal law. (This may be different for a very small number of jobs which are specifically exempt from Fair Labor Standards protections such as state employees, agricultural workers, and full time students working in various types of jobs). Here is where the confusion comes in because even though in New Hampshire the minimum is 7.25 per hour, the New Hampshire State Wage Law does not apply to: executive, administrative, professional, or outside sales employees the duties of an "outside salesperson" are defined by the FLSA. If an individual meets the criteria under the federal FLSA definition, they may be considered exempt from overtime and may be paid a certain salary per week. The definitions that the New Hampshire State Wage Act refer to and lists exemptions for include: white collar exemptions, and blue collar exemptions. However, obligations regarding the payment of minimum wages, overtime wages, and record keeping still apply. Notwithstanding the NH State Wage Act, New Hampshire has a law that requires an employee who "is not subject to the minimum wage provisions of RSA 279:21" to be compensated at a minimum of 125% of the federal required minimum wage. You should also be aware that although there is generally a minimum wage, the federal Fair Labor Standards Act (FLSA) sometimes provides exemptions from minimum wage and overtime pay under certain circumstances.
Overtime for “Salaried” Employees
Both the federal Fair Labor Standards Act (FLSA) and New Hampshire law address overtime regulations for salaried employees. Under the FLSA, some salaried workers are entitled to overtime pay under certain conditions. If you are a salaried employee and your employer qualifies as an FLSA entity, you may be eligible for overtime pay. To be eligible for overtime under the FLSA, a salaried worker must be non-exempt, and the employee’s job must meet tests regarding duties.
Employers must pay overtime to salaried employees only if the employee is non-exempt and does not fall within certain exceptions. Employers cannot make a general policy that denies overtime to all salaried employees. In fact, the U.S. Department of Labor has a three-part test to determine if a salaried employee falls within one of the categories of exempt employees. The three questions that determine if a salaried employee is exempt are:
States may also have their own laws regarding overtime pay for salaried employees, and thus it is important to understand those laws when evaluating whether or not you have been improperly denied overtime as a salaried employee in the Granite State. While this post addresses the FLSA, New Hampshire labor laws may provide for increased protections and rights that are not found under federal law.
Employee Rights and Employer Obligations
The first protection that a salaried employee has under the NH Department of Labor regulations is for the employer to pay wages as required under the wage and hour laws (see Wage and Hour Laws FAQ). More specifically, New Hampshire requires wages to be paid no less than twice a month, twice a month at not more than 15-calendar-day intervals (see How Often Should Wages Be Paid?). NH law also dictates that when an employee quits, is discharged or is laid off, the final wages must be paid on the next regular payday (see Separations in NH FAQS). While title and classification is important and should be understood by employees, what is more important is that his or her rate of compensation must meet the minimum wage requirements (see NH minimum wage FAQS) , overtime requirements (see Overtime FAQS), and be paid as required under the NH Wage and Hour Laws FAQS. Compensation must be for hours worked unless otherwise provided for by law (see Commissions and Bonuses) and the pay cannot be withheld as a penalty (see Deductions and Withholding). In addition to complying with all the statutory requirements pertaining to payment as discussed above, employers also have obligations to keep records regarding the hours worked for each employee, as well as to furnish the respective employee with a pay stub or slip describing the amounts paid to him or her (see See How Should I Pay My Employees)?
Paid and Unpaid Leaves of Absence
One leave benefit that may be available solely to salaried employees is the continuation of health insurance at group rates under the federal COBRA statute. As explained in a previous blog post (see this and that), if an employee is terminated or resigns for reasons other than "gross misconduct," they are entitled to convert their group health insurance to individually purchased coverage at group rates for 18 months through the federal COBRA statute. Termination of a salaried employee is not considered gross misconduct for purposes of COBRA.
The COBRA law requires the employer to notify the affected employees of their rights to continue benefits within 44 days after knowledge of the qualifying event. Since it is the employer’s responsibility to notify the employees, don’t wait for the employee to request continuation of their health insurance benefits.
The federal Family Medical Leave Act (FMLA) also applies to salaried employees. However, the New Hampshire Department of Labor has advised that it believes that the NH state leave laws only retain jurisdiction over FMLA-based wrongful termination claims and only in the following circumstances: (1) the employee suffers the wrongful termination 4 months or more after the leave; (2) the employer has 50 or more employees in NH; and (3) the employee is employed at the NH worksite for at least 1250 of the previous 12 months.
Dispute Resolution and Legal Matters
The process for resolving any labor dispute is complicated. New Hampshire’s Office of the Commissioner of Labor ("Labor Commission") provides the public with a number of resources including fact sheets, frequently asked questions and a complaint form, which can be used in the event of a labor dispute. Additional resources utilized by employees in New Hampshire include the New Hampshire Department of Labor website, established New Hampshire case law, and Federal statutes.
First, an employee has a duty to "exhaust administrative remedies" before bringing a lawsuit against the employer. The Employer’s Rights and Responsibilities in Relation to Wage and Hour Laws, provided by the Division of Labor Standards, states "other than the amount that may be due according to law, no employee shall be entitled to damages except those that flow as a direct result of the injury inflicted." An employee may file a wage claim with the NH Department of Labor. However, the Labor Commission will only address an employee’s allegedly unpaid wages. Currently, the Labor Commission has a long backlog of cases, which means that filing a wage claim with the Labor Commission could take over six months for a decision.
Once an employee has exhausted administrative remedies, it is imperative that the employee understand the time limitations and procedures when initiating a lawsuit. Under New Hampshire Statute RSA 275:50, "any employer…who has not paid a wage fixed by engagement of any employee for 6 days or more next succeeding the week in which such wage is becoming due, shall be liable to such employee at his usual hourly wage rate for each day that payment is withheld." The statute does not provide for attorney’s fees or interest.
Pursuant to Federal law, employees are protected by the Fair Labor Standards Act ("FLSA"). Employers in New Hampshire that employ 2 or more workers are subject to compliance with the FLSA. Under the FLSA, non-exempt salaried employees are entitled to be paid the same rate for every hour they work. If these employees work more than 40 hours and employers fail to pay overtime, employees may be entitled to double damages, legal fees and interest.
However, misclassified salaried employees may only recover compensatory damages under the FLSA for 2 years (three years for willful violations) and attorney’s fees.
Finally, the employment law attorneys at Martin, Magnuson, McCarthy & Kenney, Professional Association represent employees in New Hampshire who have sustained an injury on the job. Our attorneys have experience handling labor law disputes.
Future Changes to NH Employment Law
While several states have imposed laws altering the availability of exemptions from overtime pay under the FLSA and state law for executive, administrative and professional employees, New Hampshire has not followed the trend. As of the writing of this article, legislative changes are not in the offing. However, continued lobbying efforts by labor organizations and increasing publicity regarding the status of those who earn low to moderate salaries and who do not receive overtime pay will make it likely that legislators will at least consider the possibility of such change.
In the meantime, the U.S . Department of Labor (DOL) is expected to release major changes to the FLSA rules on white collar exemptions and on the unrelated bonus rules and changes to the categorized exemptions. On September 20, 2019, the DOL proposed rule changes for both the Hourly Rate (currently $23,660) and the High Salary Level Test for Highly Compensated Employees (currently $100,000). The DOL proposed to increase the Hourly Rate to $35,308 and the HCE Level 2 the annual rate to $147,414, and the HCE Level 2 the hourly rate to $68.36. Should the DOL proposal be signed into law, changes to the white-collar exemptions are highly likely to impact New Hampshire employers and employees earning these salaries.