Four Steps to Avoid Overtime Lawsuits


It’s never fun when your business is sued. And it can be especially upsetting when you’re being sued by one (or more) of your own employees. Here are a few simple steps you can take to minimize your risk of winding up in court facing a claim for unpaid overtime.

  1. Classify your employees properly (exempt vs. nonexempt). It’s especially important to make sure any overtime-eligible employee is classified properly to receive the overtime they’re entitled to. Remember, it’s the worker’s actual job duties, not their job title, that determined whether they’re exempt or non-exempt. If you’re unsure, the US Department of Labor has some information about exemptions available online. You should also confer with your employment law attorney.
  2. Track employee work time accurately and completely. Do not permit overtime-eligible employees to work off the clock, even if they “volunteer” to help out. It’s a good idea to record all employee work time (even for salaried exempt employees). If they are later reclassified as overtime-eligible as the result of an audit or lawsuit, you’ll need those time records to avoid paying excessive back overtime pay.
  3. Make sure your policies and procedures conform to the law. To help control overtime, you may wish, for instance, to require supervisor approval before an employee is allowed to work overtime. Be aware, however, that if an employee works the time, you have to pay for the time, even if it wasn’t approved in advance. You are allowed to initiate disciplinary action against the employee for working unauthorized overtime, but you still have to pay them for all the time they’ve already worked. Again, it’s a wise idea to have your employment law attorney review all your wage and hour policies and procedures to make sure they conform to federal, state and local laws.
  4. Enforce your policies consistently and fairly. Letting one employee “get away” with workng unauthorized overtime while punishing another for the same infraction is simply inviting a lawsuit. If you require employees to record all their time, but do nothing to enforce the rule, you could be making it easier for a disgruntled worker to claim he was pressured by his supervisor (possibly with your approval) to work off the clock. Policies that aren’t enforced aren’t worth the paper they’re printed on.

If you’re looking for a convenient, cost-effective way to track employee work time, no matter where the work is performed, consider AcroTime. This cloud-based solution is available anytime, anywhere for a low monthly fee that includes unlimited support and software upgrades. All employees need is an Internet connection and a browser, or a smartphone with our app installed and they can quickly and easily record their time.

Comments are closed.