Posted on April 29th, 2018
In 2015, nearly half of all workers in the United States habitually worked 50 hours at work. Often, without collecting their overtime pay.
There are a few potential problems you could have with your employees working overtime.
One being that according to most studies, working longer doesn’t actually equate to increased productivity.
And then there’s burnout. Even star employees may lose motivation having to consistently work overtime hours and missing out on their leisure time.
But of course the biggest potential problem is that you are not following the overtime laws correctly and it costs you a ton of money and potentially even puts you out of business!
As an employer, your focus should be on having your employees work smarter rather than longer. Especially if you dont have all of the correct rules and procedures in place for working overtime.
If you have troubles over claims of unpaid overtime from your employees it is not a good place to be.
If you’re an employer facing a lawsuit, all is not lost. You can read this article to find out if hiring an unpaid overtime lawyer is necessary.
Here’s what you need to know to fight unpaid overtime claims.
Following California Overtime Laws
California has very specific laws concerning unpaid overtime.
To ensure you don’t end up facing an expensive lawsuit, you need to learn what the laws are. You should also keep up with the latest changes in the laws regarding overtime pay.
The more you know, the better you can protect yourself and your company.
Don’t Misclassify an Employee
You could face penalties if you misclassify an employee. There is a very fine line between an independent contractor and an employee.
Many businesses try to get away with hiring an independent contractor versus hiring an employee because it’s less expensive. Unfortunately, many of them fail to follow the rules.
The same is true for when someone is misclassified as an exempt employee. When someone is exempt a business doesn’t have to pay for their overtime.
Unfortunately, not many employees fall into that category!
More than 40 Hours
Certain positions are entitled to overtime if they work over 40 hours in a week.
If you have a computer industry worker or an engineer on staff, they need to be paid for overtime.
The same is true for inside sales professionals. Actually, any hourly professional in any industry is entitled to unpaid overtime.
You also have to pay employees overtime if they work seven days per week, over eight hours per day, or more than 40 hours per week.
Tracking Everything
Part of running a business is making sure everything is reported. Anything that slips by means you could be facing a lawsuit for unpaid overtime.
Report and pay all withholding taxes. Provide accurate check stubs to all employees.
Make sure information regarding withholding taxes is visible on all pay stubs. Pay all sales commissions in a timely manner.
If an employee has to travel on behalf of the business, make sure they are properly reimbursed for all their travel, mileage, and lodging expenses.
Other Things To Look Out For
But there’s more to look out for regarding unpaid overtime.
Whether you pay your employees in cash or by check, you still need to pay them for any and all overtime they worked.
Even if they work for you on a piece-meal basis, if they go over eight hours per day or 40 hours per week, they still have earned their overtime.
Lastly, if you own a business that deals with tips, be careful. If an employee can prove they earned tips but weren’t given the money, you could face a lawsuit.
How to Prevent a Problem in the Future
Besides knowing and obeying the laws, there are are other steps your business can take to ensure all employees are paid on a timely basis.
One way to do just that is to develop and follow a policies and procedures manual. Share it with all employees so they also know and follow the guidelines.
It’s a great way to ensure no mistakes are made. It also shows employees that you take paying them in full and on time seriously.
How Unpaid Overtime Is Proven
Of course, an employee can claim unpaid overtime anytime they want.
If a worker feels overtime was denied they can file a legal claim for unpaid wages. Be aware that it’s not unusual for the damages in these cases to exceed the total amount of denied wages.
If an employee can prove their claim, the employer has to pay all unpaid overtime wages or the difference between overtime pay and regular pay. That happens if overtime hours were paid at the same rate of the regular pay.
And an employer can be held liable for paying the interest on all unpaid wages. In fact, in California, the legal interest rate for unpaid wages is at 10 percent.
But it gets worse. In addition to any unpaid wages and interest, it’s not uncommon for employers to have to pay a waiting time penalty.
This penalty can total as much as 30 days of the employee’s unpaid earnings.
And yes.. for employers its gets even worse. If you lose you not only have to pay the lawyers that represented you but the legal fees on the employee side as well!
Hire a Great Law Firm
If you’re confronted by an employee regarding unpaid overtime, it’s time to take the right steps to protect yourself.
Before you do anything, contact a great law firm.
A good attorney can help you sort out the situation and take a look at it clearly. When faced with the possibility of a lawsuit, your emotions may get the best of you.
The right law firm will help you take the right steps so you don’t make the situation worse by reacting poorly.
It’s important to make sure you do everything correctly the first time. It will cost you far less.
It will also help you if you suspect a case of fraud.
Work With Us
We’re passionate about helping employers from unfair labor laws.
If you’re struggling to figure out the current laws or feel as though your business is under constant threat, we can help.
Don’t wait until you’re facing a lawsuit. Contact us today for your free 15-minute consultation.
