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Don’t play games with overtime pay
By Lauren | September 18, 2009
Continuing my Friday series on how to keep your business out of court, let’s talk about one of the fastest-growing topics for litigation in the U.S. Employers across the country are being sued with increasing frequency for failing to comply with federal laws requiring them to pay non-exempt employees overtime. Those lawsuits can be expensive, but are easily prevented if employers simply follow the rules.
Admittedly, the rules got a little more complicated about five years ago, when the Department of Labor modified its regulations implementing the federal Fair Labor Standards Act. Certain jobs are automatically entitled to overtime pay now, as are employees who make less than a threshhold salary. Special regulations apply for executives, administrative employees, professionals, computer employees and outside salespeople. But the rules aren’t rocket science - they simply require employers to sit down, analyze each position in the company, determine who’s entitled to overtime and who isn’t, and pay overtime to people who qualify for it when they work more than forty hours a week.
Sounds simple, right? It would be, if pride and greed didn’t get in the way. Amazingly enough, some employees actually want to be exempt from overtime pay because they think being exempt makes them more important. (It doesn’t.) It’s not unusual for top executives to argue that their administrative assistants should be exempt because they think it gives them more prestige. (It really doesn’t.) And, in a lot of cases, employers withhold overtime pay because they want to save a few bucks and they think they can get away with short-changing employees who are afraid to speak up lest they lose their jobs in the midst of a recession. That nasty strategy may work in the short run, but it’s a lot less expensive to pay overtime when it’s due than to defend a federal audit or a lawsuit. It’s also, plain and simple, the right thing to do.
Employees deserve to be fairly compensated for their time. If you’re not sure how the overtime laws are supposed to work, the Department of Labor has very thoughtfully posted a series of instructional videos online at http://www.dol.gov/dol/topic/wages/overtimepay.htm to clarify the requirements. Pay required overtime now - it can save you a world of trouble in court later.
Topics: Business Ethics, Lauren Recommends, corporate responsibility, ethics |