Human Resources: The Truth About Overtime

Excerpted from Alabama Employment Law Letter; written by the law firm of Lehr, Middlebrooks, Price & Proctor, P.C. http://www.hrhero.com/alemp.shtml

The recent spate of high-dollar penalties assessed against Waffle House and Wal-Mart by the U.S. Department of Labor (DOL) for wage and hour violations reminds us that wage and hour rules and regulations aren''t to be trifled with.

More than one legal commentator has observed that Fair Labor Standards Act (FLSA) litigation will be among the "growth industries" for employees'' lawyers in the coming years. Why? Because the FLSA - like Title VII of the Civil Rights Act of 1964 - is designed to award attorneys'' fees to lawyers who successfully assist employees in vindicating the rights guaranteed to them by the law.

With that in mind, here''s a quick review of the most common wage-and-hour misunderstandings that can result in small (and large) penalties from the DOL.

Misunderstanding No. 1
"I pay all my office employees a weekly salary, so I don''t have to pay overtime."

Truth: Paying an employee on a weekly, salaried basis is only one of the requirements you need to satisfy for an employee to be exempt from FLSA overtime requirements. You must also be able to show that the employee''s duties are those of an executive, administrative, or professional employee.

Misunderstanding No. 2
"I have a policy that says overtime must be preapproved by the employee''s supervisor. If an employee doesn''t get preapproval, I don''t have to pay overtime."

Truth: You can''t use a policy that says overtime must be approved in advance to deny overtime to an employee who works (or has worked) it and isn''t exempt. If you want to enforce a policy that overtime must be approved in advance, you must use disciplinary action. You can warn, write up, suspend, or even fire an employee for working overtime without advance approval, but once the overtime is worked, you must pay for it.

Misunderstanding No. 3
"If an employee goes to a seminar outside work hours, I don''t have to pay for the time."

Truth: Sometimes you don''t have to pay for hours spent attending outside seminars, but sometimes you do. Hours that employees spend in training outside regular work hours must be paid for if (1) the employee''s supervisor requires him to attend or (2) the training, although voluntary, is under the employer''s auspices and is directly related to the employee''s current position. You don''t need to pay overtime if the employee voluntarily attends training to improve his knowledge or skill, even if the training is helpful to his current job.

Misunderstanding No. 4
"If a nonexempt employee chooses to eat lunch at her desk and ends up answering the telephone a few times, she doesn''t need to be paid for that time."

Truth: To be considered an unpaid break, an employee needs to be completely relieved of duties for more than 20 minutes. If you allow her to answer phones while eating lunch, she''s performing employment-related tasks that must be compensated, regardless of whether she chose to eat lunch at her desk.

Misunderstanding No. 5
"I know that I have a nonexempt employee who regularly works overtime, but she never records her overtime on her time sheet, so I don''t have to pay her for it."

Truth: An employer is required to pay overtime for all hours worked over 40 hours in a workweek (unless a special overtime rule applies). If you have reason to now that an employee is working overtime, you must pay for the overtime work regardless of whether she records it on her time sheet or doesn''t punch in, and it''s no defense that she didn''t record her hours on a time sheet. You may require accurate recording of hours worked and must impose discipline, if necessary, when an employee fails to do so. An employee who decides she wants to be paid for her overtime retroactively (for example, after she''s fired for some unrelated reason) can present her own records or recollections of her hours worked and recover overtime pay for all of the overtime hours she worked for the last two years (three years in cases of willful violations).

Bottom line
The number of ways employers can violate the FLSA is infinite - we''ve covered just a few examples. The main thing to remember is that the DOL will try to avoid penalizing employers for mistakes made in good-faith efforts to comply with the wage and hour laws.

So if you''re in doubt about whether you''re in compliance, it''s always wise to contact counsel or the DOL for guidance. The department''s Web site -- www.dol.gov is loaded with useful tips and real-world solutions to common wage and hour issues. If you''re a subscriber to your state''s Employment Law Letter, you can also visit http://www.hrhero.com/special.shtml for free access to HRhero.com''s special report on "Defusing the Overtime Bomb: How to Comply with the FLSA." Non-subscribers can buy the report for $47.

Copyright 2002 M. Lee Smith Publishers LLC. This article contributed by *Alabama Employment Law Letter*. Read more about the print newsletter and its editors at http://www.HRhero.com/alemp.shtml
This article should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only. Remember to check your state''s laws for more restrictive rules and regulations. For more information on state-specific employment updates written by attorneys in your state, go to: http://www.hrhero.com/empnl.shtml