In recent years, the number of lawsuits filed by employees claiming that they owed overtime pay has gone through the roof. Employees are entitled to overtime pay for any number of hours worked over 40 in a week. Unless you work for a tiny and a purely local employer, or fall within a specific exemption category, your employer is legally entitled to pay you time and a half for overtime.
However, every so often we hear about employers getting away from paying their heard-earned overtime using cheapo tricks.
It does not make a difference whether your intentions as an employer are benevolent or rancorous when it comes to avoiding overtime pay. If a non-exempt employee works for over 40 hours in a work week, that employee legally qualifies for overtime at the required rate of 1.5 times the regular rate of pay. Secondly, your employees cannot be asked to work at a regular rate for overtime. Also, they cannot pick between getting a little less than full overtime pay or no overtime pay at all. Else, you may end up becoming laughingstock at a surprise U.S. Department of Labor (DOL) investigation or a collective lawsuit, neither of which is good for you or your business.
An employer cannot under either state or federal law, ask or worse force an employee to agree to give up overtime pay if the employee has worked and earned compensable overtime. As per the law, the employee has earned overtime.
However, some employers inappropriately bargain on agreements with their workers, or in some cases even worse – an illegal arrangement is worked out by the employer.
For instance, an employee is looking for extra income and offers to work overtime, to which his employer readily agrees to. Nonetheless, subject to both state and federal law, overtime pay cannot be turned down by the employee by oral or written agreement. An oral or a written agreement that only eight hours per day or 40 hours per week will be considered working time – regardless of actual hours worked, likewise fizzles the test of overtime compliance.
Announcements by the employer or a policy in the employee handbook stating that no overtime will be permitted, or that overtime will not be paid unless approved ahead of time, won’t weaken the employee’s entitlement to compensation for compensable overtime hours.
The sum and substance is that if an employee is legally empowered to overtime under both state and federal law. The organization holds legal responsibility for overtime irrespective of any private contract between the two parties. Numerous bosses have been horrified to find this at a state or federal overtime audit, even when the employees don’t want the overtime. The conclusion of an overtime audit won’t be impacted by the protests of loyal employees expressing that they agreed not to be paid overtime, but to straight time. The two parties cannot agree to breach wage or hour laws. It is a dangerous and deep down a futile business practice.