5 Tips to Make Sure You Don’t Stiff Anyone

Friday, March 16, 2018, 6:00 AM | Leave Comment

Employers are an authority to their employees, and they’re expected to be on top of all the rules and regulations established by the Department of Labor and to be in compliance with the Fair Labor Standards Act (FLSA).

Businesses receive a lot of trust from their employees, however, that doesn’t mean employees are not keeping an eye out for themselves to make sure they are paid fairly for the work they do.

Given the complexity of laws and the fact that they can change without a lot of notice, it’s important that as an employer, you are staying up to date on policy; the consequences for not doing so could result in a lawsuit and a lot of money lost.

Here are some tips to help you avoid overtime complications.

  1. Know Your Overtime Laws

    Overtime law is one of the most common employment laws to be violated, and it comes with a set of costly consequences.

    Whether intentional or unintentional, this law is broken in a few different ways: labeling employees incorrectly as non-exempt, requesting that employees work off the clock or hiring them as independent contractors when they have the same responsibilities as a regular employee.

    Not only can you not request employees work off the clock, you are responsible for forbidding them from doing so. There’s no turning a blind eye to employees working extra for free — they must be paid fairly.

  2. Know When to Offer Salary Pay

    For this reason, if an employee is paid a high-enough salary — at least $455 per week to be exact — they could be classified as exempt and be allowed to work outside of their normal business hours without violating any overtime laws.

    This is the best route to take to avoid a lawsuit if you think an employee may be responsible for enough work to risk earning overtime pay and if their responsibilities are significant enough to constitute salary pay and exempt status.

  3. Require Authorization for Overtime Work

    A good way to avoid overtime slip ups is by being as clear as possible with employees about the overtime policy.

    Require authorization from a supervisor or manager for employees to work overtime and include this policy in the employee contract to ensure it’s not overlooked.

    Being clear about worker duties so employees do not feel they need to do more work than they’re supposed to will also help avoid unnecessary overtime hours logged.

  4. Keep Detailed Records of Hours Worked

    Requiring that employees clock in and out while they work is not only a way to make sure employees are paid correctly, it’s also a way to document exactly how much each person worked, in case it is ever put into question.

    Without detailed records, it’s possible for employees to inflate their number of hours worked, which could cause you to have to pay them more than you owe.

    It’s not uncommon for employers to be required to cash out significant overtime pay when employees file lawsuits regarding mispay.

    Even with exempt employees, it’s good practice to keep track of hours worked, just in case their classification changes.

  5. Offer a Less-Than-40-Hour Work Week

    Some employers offer employees flexible schedules for their work week that may allow them to work under 40 hours each week.

    According to an infographic by Ohio University, the average worker is only productive for two hours and 53 minutes per 8 hour workday.

    Research in Sweden suggests that 6 hour work days boost productivity and even improve employee health. By giving employees the option to work a couple hours under the standard 40 hours, you can decrease the chances of them accruing overtime and perhaps even increase productivity.

As an employer, you’re responsible for upholding the FLSA, which closely regulates overtime pay. By knowing the ins and outs of overtime law, and making smart decisions about when to put a position on a salary, you can avoid a lot of simple mistakes that may lead to lawsuits.

It also helps to be proactive by requiring authorization for employees to work overtime and keeping detailed records of the hours your employees are working, so if you do have to pay overtime, you know what it’s for.

If possible, implement progressive policies to allow employees to have flexible schedules, which can not only help you avoid overtime pay, it can boost their health, productivity, and work-life balance.

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