You depend on your employees to keep your business running and they depend on you for their paychecks. Yet, in many ways, your interests and the interests of your staff members are at odds. It is best for your profit margins for you to keep staffing costs as low as possible, while your workers would obviously prefer to have the biggest paychecks possible.
You may not require or even offer overtime work; still, some employees may want those extra hours paid at the higher rate. Employees may continue working while others may hang around the workplace after the end of each shift just to add a few more minutes to their time clock records and potentially push themselves into overtime wages. Such actions could significantly impact your business’s budget.
Your company does have an obligation to pay overtime wages if someone puts in more than 40 hours of work in a given work week. If your company failed to pay overtime wages when required, your workers might bring overtime wage claims against the company. How can you protect against such claims?
Maintain time clock records
Federal employment laws actually mandate that companies retain certain employment records so that regulatory agencies can validate claims against businesses. Typically, your company needs to arrange to retain employment records like when someone clocked in and out for at least three years. Often times, overtime claims arise from a dispute over the number of hours actually worked. The burden is on the employer to prove the employee did not work more than 40 hours. It is not the employees burden to prove otherwise. This is because it is the employer’s responsibility to keep a clear, trustworthy record of the hours worked each day and each week. Keeping such records will help you quickly prove that their claims of unpaid overtime are false because you can show they never worked more than 40 hours and that their paychecks match the timekeeping records.
Be proactive about scheduling
If your company wants to avoid overtime wages and prevent claims from workers who want overtime pay, the best option is to be careful to never schedule someone for a full 40 hours. Leaving a half hour or an hour of wiggle room when you schedule workers each week can prevent them from going over that 40-hour mark and costing your business extra money.
It’s crucial that you recognize that if the worker puts in the hours, even if you did not approve the overtime, you still have an obligation to pay them in full. Educating yourself about overtime wage claims and your obligations as an employer can help you prevent unpaid overtime wage claims or quickly settle them when they arise.