At-will employment
Employment in New Mexico remains "at will." This means that, absent a contract of employment, an employer may terminate an employee at any time for any reason or no reason at all, provided the reason is not contrary to law. Employers should know, however, that an employer’s written policies and even some oral promises regarding employment can give rise to express or implied contracts for employment. Employers who wish to retain their right to fire employees at will should expressly reserve that right in writing to employees and should not grant employees rights that conflict with employment at will, for example, a right to progressive discipline or a right to be disciplined or terminated only "for cause."
Wage and hour law
The Federal Fair Labor Standards Act (FLSA), administered by the Wage and Hour Division of the United States Department of Labor, establishes minimum requirements for the payment of wages and overtime to covered employees. The FLSA does not prohibit employers from paying wages or providing benefits that exceed those required by the FLSA.
With some exceptions, the FLSA’s provisions apply to all non-exempt employees whose employers are engaged in business affecting interstate commerce, regardless of whether the employees are paid on an hourly or salary basis. Certain employees are exempt from the law. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis of not less than $455 per week. In addition, employees must meet certain detailed tests for either executive, administrative, professional, creative professional, computer, outside sales, highly compensated employees, and police, firefighters, paramedics and other first responder exemptions. Job titles do not determine exempt status.
Basically, the FLSA provides that no covered employee may be paid less than the federal minimum wage (presently $5.15 per hour) for regular hours worked. The law does not limit the number of hours an employee may work in a week. However, employees who work more than 40 hours in a week must be paid a premium for those excess hours equal to one and one-half times the employee’s regular hourly rate. For example, an employee who works 43 hours in a regular workweek must be paid a minimum of $5.15 per hour for the first 40 hours plus one and one-half that rate, or $7.73, per hour for the three hours worked in excess of 40. The law does not require an employer to pay overtime for holidays or personal days, that is, for work done on Saturdays, Sundays, holidays or regular days of rest, if time worked on those days does not exceed the non-overtime maximum for the workweek. At present, compensatory time is available only for employees of a public agency.
Employers may decide how many overtime hours an employee may work. However, employees are entitled to pay for all hours worked regardless of whether they are worked contrary to an employer’s express direction not to. If employees routinely work excessive amounts of overtime without advance authorization, then this can become a disciplinary matter.
Generally, employees are not paid for lunch breaks. However, they may be paid for rest breaks, depending on the circumstances. The law also does not require employers to pay employees on days they do not work, for example, on holidays, vacation days or sick days. Also, as a general matter, employees are not paid for time spent traveling to work or pre and post work activities unless such activities are an integral part of and indispensable to the employees’ principal activities.
The FLSA requires employers to keep records of hours worked by their hourly employees. An employer may not, for purposes of overtime computation, estimate how long a task takes as a substitute for keeping appropriate records. Employers must keep the following records for a three-year period: personal information about the employee; hour and day when work week begins; total hours worked each day and each work week; total daily or weekly straight-time earnings; regular hourly pay rate; total overtime pay for work week; deductions; total wages paid for each pay period; date of payment; and pay period covered.
Employers can be subject to penalties of up to two years’ back pay for incorrectly classifying an employee. Employers may unintentionally convert an exempt employee into a non-exempt employee by changing pay or job duties; accordingly, employers should review employee classifications periodically.
New Mexico law, administered by the New Mexico Labor and Industrial Division of the Department of Labor, contains similar provisions that govern payment of wages, and it covers almost all employers, including some who may be exempt from the federal act. The state minimum wage is $4.25 per hour. A premium of one and one-half times the regular rate must be paid for hours the employee has worked in excess of 48 in a workweek. Violations of either the federal or the state minimum wage or overtime provisions can render the employer liable to the employee for twice the amount of the employee’s unpaid wages for up to three years, plus attorney’s fees.
New Mexico law requires most employers to pay employees on a regular semi-monthly basis on designated paydays and to pay a discharged employee any wages due within five days of termination. In the latter case, if the wages are not paid within five days upon proper demand, the employer is required to pay the employee a penalty in an amount equal to the employee’s rate of pay from the date of discharge until final payment is made, up to 60 days after the date of discharge.
Employees who quit must receive their final pay no later than the next regular payday. Both federal and state law prohibit employers from making certain deductions from employees’ pay.
Employee Leave Entitlements
The federal Family and Medical Leave Act requires employers with more than 50 employees to provide up to 12 weeks of unpaid leave to employees who have serious medical conditions or whose immediate family members have serious medical conditions. The leave, with notice and reporting requirements, may be taken intermittently or consecutively. Leave also may be taken to care for a newborn or adopted child.
The Uniform Services Employment and Re-Employment Rights Act (USERRA) applies to persons who perform duty, voluntarily or involuntarily, in the "uniformed services," including the Army, Navy, Marine Corps and Air Force. USERRA applies to all employers. It requires employers to grant reservists leave to attend military training. Employers also must: re-employ employees upon their return from military service; guarantee any pension plan benefits that accrued during military service; provide health benefits continuation for service members and their families up to 18 months, even if the employer is not subject to COBRA; and refrain from discriminating against a person on the basis of past, current or future military service. Employers must also post notice of employee rights under USERRA.
Workers’ Compensation
The Workers’ Compensation law ensures compensation will be paid to injured employees for job- related injuries irrespective of whether the employer was at fault. It is the exclusive remedy for employees injured on the job.
The employer is under no obligation to inform an injured employee that he or she may have a workers’ compensation claim. Instead, the burden of pursuing workers’ compensation remedies rests entirely with the injured employee.
To obtain compensation, an employee must immediately notify the employer of the injury and file a claim for workers’ compensation benefits with the employer or its insurer. An employer or its insurer may challenge whether an injury incurred on the job or the extent or nature of the claimed injury. The New Mexico Workers’ Compensation Administration resolves disputes administratively, subject to review in state district court.
Unemployment compensation law
An individual who is laid off or whose employment is involuntarily terminated for reasons other than job-related misconduct is eligible to receive unemployment compensation benefits.
To be eligible to receive unemployment compensation, an individual must have been unemployed for a period of at least one week. To remain eligible, he or she must actively seek employment and must register and report regularly to a local unemployment office for the purpose of obtaining employment. Individuals who are students or who work part time may be eligible for benefits.
If it is determined that an individual qualifies for unemployment benefits, he or she will receive an amount calculated on the basis of what his or her earnings were while employed. These benefits are subject to certain minimums and maximums, and any payments may be reduced by amounts received through retirement, pension or annuity plans. The benefit period usually extends to a maximum of 26 weeks.
Where a request for unemployment compensation is denied or a grant of unemployment compensation is disputed, the employee or employer may appeal an initial decision to an appeals referee and then to a board of review. The decision of the board of review may in turn be appealed to the New Mexico District Court.
Claims for unemployment benefits are handled by the New Mexico Employment Security Department.
Special Note - This information has been issued to inform and not to advise. It is based on New Mexico law in effect at the time of writing. The statements are general and individual facts in any given situation may alter their application or involve other laws not referred to here. You should always seek advice from an attorney if any questions arise. This document is intended as a public service and is not an endorsement of any attorney or law firm.
02/06