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Be careful how you answer pleas for overtime pay

by on
in HR Management,Human Resources

Issue: If you're sued for unpaid overtime pay, your damages can mount quickly if the court sees a "willful" violation.

Risk: The FLSA enables courts to award employees up to two years' unpaid overtime, but "willful" violations extend awards to three years.

Action: Advise managers to funnel all questions about overtime pay to you or someone else in HR who knows overtime law.

Counsel your managers to treat overtime complaints with respect, and avoid any cavalier statements or excuses about why someone hasn't been paid overtime.

Recent case: The U.S. Labor Department brought an FLSA overtime claim on behalf of eight employees of a home health care company. A district court sided with the employees.

But the court also punished the company for "willfully" violating FLSA, saying it knew the overtime refusal was illegal, but did it anyway. It awarded the eight employees three years' worth of unpaid back pay.

Court's reasoning: When an employee complained about being denied overtime pay, a manager told her that the company would "go broke if it had to pay the nurses . . . for their overtime." When another employee demanded overtime, she was told that if the company had to pay overtime, "it would file for bankruptcy." (Chao v. A-One Medical Services Inc., No. 02-35158, 9th Cir., 2003)

Advice: Even if you think you're giving "good faith" explanations, including the organization's tenuous financial situation, it's more likely that such admissions will simply build a record for a court to find that you willfully violated the law. So advise managers to direct all questions about overtime to you or someone else in HR who knows overtime law inside and out.

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