Can You Pay Budtenders Salary Instead of Overtime in New York?

What this page covers

• The basic NY overtime rule
• What “salary” actually means under labor law
• The difference between exempt and non-exempt employees
• Why most budtenders are non-exempt
• Real dispensary scenarios
• What happens if you fail to pay overtime

The basic overtime rule in New York

In New York, most employees must receive overtime pay at 1.5 times their regular rate of pay for all hours worked over 40 in a workweek.

This rule applies to retail businesses, including dispensaries.

Paying someone a salary does not remove the overtime requirement.

What “salary” really means

Salary means the employee receives a fixed amount each pay period.

It does not mean:

• No overtime
• No hour tracking
• No time sheets

To legally avoid overtime, an employee must qualify as exempt under specific state and federal standards.

What makes someone exempt from overtime

To be exempt, an employee must meet both:

• A minimum salary threshold
• A specific job duties test

The main exemptions in retail settings are executive and administrative.

Executive exemption requires:

• Primary duty is managing the business or a department
• Regularly directing two or more full-time employees
• Authority to hire or fire, or strong input into those decisions
• Meeting the required salary threshold under NY law

A budtender working the sales floor does not meet this test.

Administrative exemption requires:

• Office or non-manual work
• Work directly related to management or general business operations
• Independent judgment on significant matters
• Meeting the required salary threshold

Most budtenders do not qualify under this test either.

Why budtenders are almost always non-exempt

Budtenders typically:

• Assist customers
• Operate POS systems
• Follow store scripts and procedures
• Work under supervision
• Do not manage departments
• Do not make high-level business decisions

This makes them non-exempt employees.

Non-exempt employees must receive overtime pay after 40 hours, even if paid a salary.

Real dispensary scenarios

“We put everyone on salary to simplify payroll”

If budtenders are working 45 or 50 hours per week and not receiving overtime, that is unpaid overtime exposure.

“They agreed to the salary”

Employee agreement does not override wage law.

You cannot waive overtime through a contract.

“They’re keyholders”

Being a keyholder alone does not make someone exempt.

If they are primarily selling and assisting customers, they remain non-exempt.

What happens if you do not pay overtime

Failure to pay overtime can result in:

• Back wages for up to six years in NY
• Liquidated damages equal to 100 percent of unpaid wages
• Interest
• Attorney’s fees
• Civil penalties

One complaint can trigger a broader payroll review.

Payroll violations often uncover additional issues like spread of hours and pay stub errors.

Important payroll reality

Even salaried non-exempt employees:

• Must track hours worked
• Must be paid overtime after 40 hours
• Must receive compliant pay stubs

Salary is a payment method. It is not an exemption from overtime.

How to reduce risk

• Classify budtenders as non-exempt unless clearly qualified otherwise
• Track all hours worked
• Pay overtime at 1.5 times regular rate
• Review job descriptions carefully before claiming exemption
• Avoid assuming retail staff qualify as managers

Retail cannabis roles are almost always non-exempt.

Go Here Next

• Can you 1099 Budtenders in NYS?
• How Long Must NY Dispensaries Keep Payroll Records?
• What Is “Spread of Hours” Pay in NY Retail?
• Firing an Employee in aNYSDispensary (At-Will Limits)

Source material

• New York Labor Law overtime FAQ
• New York Codes, Rules and Regulations, Part 142 (Minimum Wage Orders)
• Federal Fair Labor Standards Act (29 U.S.C. § 207)
• Handy Reference Guide to the Fair Labor Standards Act