How To Start & Grow Your Business

Now is the Time to Review your Overtime Policies

From the Editor's Desk
Jan 19th, 2015
  • Estimated reading time: 1 min read
  • Hummy's
    Highlights

    1Habitual unpaid overtime "just because" is illegal. 2Get professional and legal advice if you're unsure. 3Exempting employees from overtime must be justified.
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Human Resources

Human Resources-Hanging file folder labeled Payroll Photo Credit: Zerbor Shutterstock

In her article, “Why Overtime Pay Rules Matter Right Now,” Rebecca Mazin urges employers to take stock of their overtime policies to ensure compliance with current regulations, particularly since overtime exemptions came under federal scrutiny in March 2014.

What not to do:

The author mentions that some businesses, in an attempt to avoid paying overtime, have been promoting staff to job titles such as “assistant manager”—exempt from overtime pay—without significantly changing their job description. These “managers” then earn less per hour than their subordinates.

She notes a few high profile cases where employers were found to be in violation of federal regulations and the companies were forced to pay back wages to employees who had been incorrectly classified.

What to do:

1. First assume the employee is eligible

In the case of new hires:

  • First assume the employee is eligible for overtime, and
  • Force yourself to identify reasons why they would be ineligible, instead of the other way around.

2. Scrutinize your existing exempt positions

In the case of existing employees:

  • Mazin recommends looking at each job that is currently deemed ineligible for overtime, to ensure that it has been classified correctly.
  • A thorough review of your overtime policies may be easier with help from a human resource specialist or an attorney.

“A culture of working overtime hours for face time and “because that’s what it takes” that does not focus on specific business reasons can run afoul of the law, increase turnover, and make people just plain unhappy. Not the face you want your customers or clients to see,” Mazin concludes.

To read the original article in its entirely, please visit Fox Business’ Small Business Center.

About the Author

From the Editor's Desk

This article was written by a bizHUMM Staff Writer. We aim to provide practical tips that help solve your burning small business questions. If you have any suggestions or ideas for articles, please email them to: editor@bizhumm.com