Avoid issues with Overtime Pay | DCR Workforce Blog

Avoid issues with Overtime Pay

The Wage and Hour Division of the Department of Labor is a strict taskmaster and could prove to be the nemesis of many companies, which merit an investigation and scrutiny of its operations under the wage violation category.  Non-payment of overtime pay is considered to form a major part of the wage violations occurring in America and it helps organizations to gain a clear understanding of the complex rules and guidelines that make up the labor law, more so if they are small and cannot invest in smart and expensive legal counsel to make sure that they stay out of trouble.

When in crunch to improve productivity, a company could either hire more hands or get the existing employees to put in a little more time to meet the production targets; which is a very sensible thing to do, especially when it is a short term requirement. However, the employer would be wise to ensure that he stays on the right side of all the relevant state and federal employment laws. A single complaint from any unhappy employee could bring in big trouble and setting up an audit trail and clear records is one way of ensuring protection from penalties later. It is also important for the employer to know about the rules governing overtime.  Then there must be strict enforcement among the employees, who could be unaware of the rules or careless about following them. Many times, violations of the rules occur due to confusion about the requirements or a possible conflict between two separate rules.

Among the best ways of avoiding subsequent conflicts in these matters; automating time and attendance processes leads first. Adopting the right technology could improve the compliance levels and maintain fool-proof records capturing time and an audit trail; while paying the employees correctly could sometimes result in saving money. The time clock will need to be integrated with the schedule of the employee and care must be taken to prevent early punches and buddy punches (where a friend may punch in the employee. By integrating the information between the access points and the time clock, major deviations can be eliminated. Classify each and every employee right and feed that information to the scheduling software and maintain detailed records of digital and searchable data.

It pays to remember that a call taken on a phone issued by the company for official use may also qualify for overtime payment. Issuing such equipment to employees who are in the exempt category for overtime would be tantamount to keeping the door open to problems in future in the form of complaints and audits,  as had happened in some cases where the employee decided to make some extra bucks by questioning the exempt status and claiming overtime pay. It is possible to avoid such a predicament by obtaining an agreement for the exempt employees to work even after standard hours.

To avoid potential non-compliance with meal break times, an employer may ensure that meal times are built into schedules, keeping forecast of peak hour demands and other issues in the consideration set. Some managers prefer to have more flexibility by shortening the length of the shift, thereby eliminating the need for a meal break. In the case of independent contract workers, it is extremely important to understand the applicable wage, tax and labor laws and their eligibility for overtime, overtime rates and work that gets classified as overtime.

Because at the end of the day, lack of knowledge and/or information are not considered as acceptable defense in any trial and any court of law!

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.