Overtime Violations Can Cost You More Than Just Time and a Half

Are you sure which of your employees are entitled to overtime compensation? It only takes one disgruntled worker to launch a lawsuit or government audit. 

With so many staff reductions and layoffs these days, there is an explosion of alleged overtime suits taking place as well as claims of wrongful termination. Plaintiffs’ attorneys are adding claims for unpaid overtime to wrongful discharge complaints to increase potential payouts.

That's why it's more important than ever for employers to review their pay practices to avoid putting their companies at risk.

Small Businesses at Risk

Small businesses are at greater risk for an overtime audit because they often lack the resources to monitor compliance issues appropriately. To protect yourself, make sure you have carefully defined an employee's specific job functions. Titles themselves don't necessarily determine whether or not someone is exempt from overtime. 

Good job descriptions may be the best defense to prevent overtime issues. Ideally, your employee should sign off on the job description so there isn't any room for dispute.

Good record-keeping is also important because the burden is typically on the employer to demonstrate that it paid workers appropriately for every hour worked. Make sure you keep detailed timekeeping records on all employees. There are several tools including time clocks, identity swipe cards, and time-tracking software to assist you. Even a hand-written time-sheet completed and signed by your employee is acceptable. It's important all your payroll records are in order for any employee you anticipate terminating.

As a business owner, you should be concerned about the risk of overtime claims. The sooner you bring your company’s practices into compliance, the less vulnerable you are to overtime actions filed against your company.