One of our employees complained she was not being paid for working overtime. We thought because we paid her a salary, she was not entitled to overtime, but after consulting with our legal counsel, we realize we were wrong. What steps should we take to make sure we are in compliance as to everyone?
Talk to your legal counsel about arranging for an internal wage and hour audit.
Wage and hour mistakes can lead to significant employer liability, and there are several types you may be unknowingly making, like the one you described – improperly designating an employee as exempt from overtime when they do not actually meet the legal criteria to be treated as exempt.
Other wage-related mistakes include not keeping accurate time records; misclassifying an individual as a contractor instead of as an employee; failing to accurately document meal breaks; failing to pay the highest required minimum wage (i.e., federal, state, or local); and failing to pay for various government-mandated paid leaves.
You want to get your wage and hour "house cleaning" done now, rather than wait and risk having a claim filed by an employee. In response, the U.S. Department of Labor (DOL) can audit you and wages paid to all of your employees for the past several years - based on one employee filing a claim. The DOL can assess liquidated damages if violations are found, which will mean you will owe double the amount of illegally unpaid wages the DOL finds.
Jack McCalmon and Leslie Zieren are attorneys with more than 50 years combined experience assisting employers in lowering their risk, including answering questions, like the one above, through the McCalmon Group's Best Practices Help Line. The Best Practice Help Line is a service of The McCalmon Group, Inc. Your organization may have access to The Best Practice Help Line or a similar service from another provider at no cost to you or at a discount. For questions about The Best Practice Help Line or what similar services are available to you via this Platform, call 888.712.7667.
If you have a question that you would like Jack McCalmon or Leslie Zieren to consider for this column, please submit it to email@example.com. Please note that The McCalmon Group cannot guarantee that your question will be answered. Answers are based on generally accepted risk management best practices. They are not, and should not be considered, legal advice. If you need an answer immediately or desire legal advice, please call your local legal counsel.