How to Avoid Costly Complaints about Overtime Pay


One of the most contentious issues a business can face with its employees is the subject of overtime work and pay.

Workers must be properly categorized

If an employer does not properly categorize employees as overtime exempt or non-exempt and has not informed those employees about what constitutes proper legal overtime, they will run into problems with possible workplace complaints.

Exempt or non-exempt?

Let’s go over the basics for exempt and non-exempt employees.

Under the Fair Labor Standards Act, an employee is deemed exempt from overtime if they are an administrative staff, executive, or professional. This includes outside sales and also some tech people.

Some criteria

One basic criteria used to determine if an employee is exempt is how they are paid:

  • They get a salary rather than an hourly wage.
  • They earn a minumum of $455 per week.
  • They are paid a full salary regardless of how much time they work.

Of course, other factors must be considered.

However, there are some non-standard exemptions that many employers aren’t aware of or don’t apply them properly.  Here is an example of how an employer can run afoul of this classification.

What happened in one case we handled

In one case we handled, a home healthcare operator had deemed its employees exempt under the Home Health Care and the Companionship Services Exemption . Such employees are considered exempt if they are off duty after their shift even though they may stay the night in a home.  However, there were other complications in this case and one of the employees filed a complaint with the wage and hour division, seeking unpaid overtime. After an investigation that the employer knew nothing about, the Department of Labor demanded a hefty settlement for the workers.

At that time, we were called in and with our expertise were able to resolve the matter on terms favorable to the employer.

Need to know the rules or it can be costly

This case highlights the fact that an employer needs to know the rules of the game as far as employment law and overtime is concerned and follow them scrupulously.  Or it will be costly.

Melderlaw can perform an audit

Melderlaw can perform an audit in order to uncover hidden liability like unpaid overtime and misclassified employees or independent contractors.

We can provide proactive solutions to minimize or eliminate the risk for the you.

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