May 27, 2015

Four Mistakes Employers Make With Overtime

1.  Assume every salaried employee is exempt from overtime.

Only employees earning salary of at least $455 per week qualify for the salary exemption from overtime.  Further, even salary is not enough to qualify someone as an “executive” excluded from overtime.  Review the definition of executive under the Fair Labor Standards Act to ensure your salaried employees are properly exempted from overtime.

2.  Blur the lines between non-exempt jobs and exempt jobs

Employers beware- requiring exempt employees to perform the duties of non-exempt employees may entitle the non-exempt employee to overtime pay.

3.  Misidentify time as “on-call”

Time an employee spends “on-call” is not considered hours worked only if the employee is not required to remain on the employer’s premises and is free to use the time for personal pursuits, subject only to leaving word where he can be reached.  If the on-call time is so restrictive that the employee cannot use the time for his own benefit, then the time is not “on-call” time, but is considered hours worked.

4.  Fail to keep accurate records

Employers must keep accurate records for each employee detailing the employee’s personal information, hours worked each day and each workweek, the wages paid (gross to net amounts paid), with itemized deductions and the basis upon which the wages are paid. These records are not only required by law, but will provide the required support should the employer’s decision not to provide overtime be challenged.  Note that in New Jersey these records must be maintained for six years.