Overtime disputes are disagreements between a business owner or manager and an employee about the hours worked and which hours may qualify for overtime wages. Overtime wage laws were enacted to protect employees from overwork. Most disputes can be prevented by following these tips. When a dispute continues, a mediation service or legal counsel may be able to provide you with professional guidance.
Computerized timekeeping can help to ensure that your employees are paid correctly. There are many pieces of affordable software geared toward small business owners. This software keeps track of time periods and the hours worked by each employee. You can track the hours to anticipate overtime payments. The system will automatically calculate the correct overtime wages for an employee.
Agreement on Hours Worked
If you are still using a paper timekeeping system, have your employees review the hours worked before you pay them. Ask the employee to sign off on the hours worked. If the employee has verified the correctness of the time sheet, this can save you headaches later on.
Calculating Wages Correctly
Correctly calculating wages is another helpful way to avoid an overtime dispute. You may even wish to show on the employee’s pay stub how their wages were calculated. For example, if you pay your employees weekly and John Doe worked 45 hours, your wage calculations might show 40 x $20 = $800 in regular wages plus the overtime wages of 1.5 times the hourly rate of $20, which is $30, and the total overtime earnings of 5 x $30 = $150. Showing how wages were calculated can be important for overtime litigation.
Maintaining Compliance with State and Federal Laws
Following the state and federal guidelines on overtime payments is also essential to avoiding disputes. For example, a manager may be exempt from overtime, but it is important to correctly classify someone as a manager and not just give that person the designation in order to avoid paying overtime wages. Some states will consider anything worked more than eight hours in one day to be “overtime”, while other states stipulate that hours worked in excess of 40 in seven calendar days need to be paid on an overtime basis.
Despite your best preparation and good intentions, you cannot completely eliminate the risk of legal disputes. If you find yourself staring down the barrel of a loaded litigation attorney, don’t wait to consult legal counsel of your own. Certain firms even specialize in these kinds of disputes. If possible, try to contact an employment law firm that specializes in overtime disputes in order to minimize your losses due to legal action. If a dispute arises, you want it to go away as quickly and as quietly as possible so you can get back to growing and operating your business.
Careful record keeping will help you to avoid most overtime disputes. Showing how wages are calculated is another helpful tool. If you do find yourself in an overtime dispute, there are helpful legal resources and legal representation for small business owners.