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Overtime Triggers

In a downturn, companies attempt to do more with fewer employees or at best maintain status quo with fewer employees, a process that can be mutually beneficial to both employer and employee.

A quick review of some points of wage and hour law can help employers determine when to pay overtime.

This checklist is not meant to advise a course of action or condone any decision made by the reader and has no standing in employment law.  Any concerns should be brought to an employment law firm or to an HR association with access to legal counsel.

  1. Be absolutely clear on exempt/non-exempt status according to Fair Labor Standards Act (FLSA).
    A CEO and vice presidents are easily identified as exempt.  Equally easy to identify as nonexempt are clerks, receptionists, and laborers.  A grey area includes coordinators, analysts an administrative staff.  It’s up to the employer to decide on their classification with the knowledge that if they are audited and there is doubt about the classification the government will expect you to pay the overtime.
  2. Overtime must be paid for all overtime worked even time not approved.
    You may write up or discipline the employee for working without approval but you cannot withhold the overtime pay. An employee may habitually stay ½ longer each day to catch up or keep up with added responsibilities due to downsizing in the department or company.  Employees should be directed to discuss with their managers how much extra work they have and determine priorities for the work.  The manager then can determine if overtime is appropriate or if re-distribution or re-classification of the work is a viable solution.
  3. Zealous workers who work through lunch should be encouraged to take their lunch time away from their desk in a non working atmosphere.
    If they “work through” their lunch or eat at their desks while continuing to work that time should be considered part of their work day and wages.  If doing so puts them over 40 hours a week they are considered due overtime.Wage and hour violations of this type result in the majority of lawsuits.  Once happy employees, now may be upset at dismissal and seek representation to pursue claims against the company, are often questioned about uncompensated skipped lunches and breaks.
  4. Mandatory training time will trigger weekly overtime if it pushes the week above 40 hours.
    If you schedule mandatory training before or after their usual work day those additional hours could result in overtime. If you schedule mandatory brown bag or lunch and learn programs during an employee lunch hour then additional hour of overtime pay may result since they gave up their “off the clock” time.
  5. Travel time can trigger overtime.
    Time to and from work is not considered work time.  Inter company travel from one location to another is considered work time and could trigger over time is the extra time pushes the 40 hour work week.
  6. Waiting time can trigger overtime.
    If you designate an employee to be in a certain place at a certain time that time can result in overtime pay.  If require an employee to wait by the phone to field customer calls at home or monitor security alarms or monitor remote cameras they are being “paid to wait” and that is considered compensable.

Managing overtime can be confusing.  Always speak with your human resource or legal department.  Contact HR organizations for referrals to articles or assistance.  Seek outside counsel if you have concerns about the appropriateness and consistencies of your rules and procedures.

Sources: HR Magazine October 2008, Aberdeen Group January 2009