Tuesday, December 18, 2012

Online, after-time and overtime hours create potential problems

The other day, this story - Don't Get Sued by Your Number One Employee - from the Fox Business website gave additional food for thought about potential exposure for violations related to unpaid overtime hours:

Karen Harned, executive director of the National Federation of Independent Business (NFIB) Small Business Legal Center, said at the root of the overtime regulation debate is the Fair Labor Standards Act (FLSA). The law establishes minimum wage, overtime pay and recordkeeping and youth employment standards, but is also extremely outdated, having been written in 1938.

“The Department of Labor estimates 70% of businesses are out of compliance with the FLSA,” Harned said. “This just points out how confusing [the law] is.”

And oftentimes, small business owners don’t even realize they are essentially breaking the law. For example, just because an employee is "non-exempt" from working overtime, doesn't mean they are entitled to continue working past their 40 hours per week, if the employer imposes such a regulation.

With technology allowing the lines to blur between work and off-duty time, employers need to be aware of when their employees are really working and to ensure they are properly classified so they don't get hit with a lawsuit for back pay or get tripped up in a Wage and Hour audit. It's an issue that I've had to deal with more than once and it's one where lawyers can easily get involved, costing employers large sums of money, win or lose.

Of course, always, always document everything - and expect employees to do the same from their end.

You can visit the U.S. Department of Labor and their Wage and Hour Division online for more guidance.


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