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Protecting Against Overtime Lawsuits

Date: 06/12/2006 | Category: Business | Author: Diana Heeb Bivona

Wage and hour lawsuits are more common then you think. Understanding all the nuances can be particularly difficult for a small business owner.  One general rule of thumb to keep in mind is that only a handful of exceptions to the rule that employees should receive hourly pay, with time and a half for overtime truly exist.   Knowing this, it is important that you give extra scrutiny to any exceptions to hourly pay. In fact, consider having a second or even third set of eyes examine the facts in a particular situation.  Having a human resource professional or even an attorney sign off on each exemption is not a bad idea.

Secondly, review your company pay practices frequently. Look at each job position, an employee’s performance and evaluation forms, and the pay scale for that position.  Objectively and fairly determine if that position is truly exempt.  Again, use a fresh set of eyes to look at the information.

Finally, develop an atmosphere of fairness and good faith when dealing with your employees.  Steer clear of demanding that employees accomplish everything in a 40-hour workweek and if they don’t, avoid encouraging them to work longer without overtime.

If you do discover employees that are working “off the clock”, coach and counsel them against doing so, but also discipline and document all such occasions.  By keeping documentation, you can negate later claims during lawsuits that you encouraged such behavior.

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