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Get Well-Versed in Overtime or Face Bad-Faith Damages

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in Human Resources

Ignorance of the law is no excuse when it comes to deciding who’s exempt from overtime and who gets paid hourly. Although the Fair Labor Standards Act (FLSA) and the U.S. Labor Department’s regulations are complex, you are supposed to understand them.

Educate yourself and seek out expert help to avoid misclassifying an employee, which could be a potentially costly mistake. To show you acted in good faith:

  • Review the employee’s job description and compare it with the actual job. Correct any errors.
  • If the position was previously listed as exempt, check to see if that’s still appropriate.
  • If you aren’t positive, you may want to ask the Labor Department for an opinion letter. That can help show good faith. Learn more about opinion letters at www.dol.gov/esa/whd/opinion/opinion.htm.

Recent case: Jonathan Feniger sued his former employer, Café Aroma, and its owner, claiming he was owed overtime because they had misclassified him as an exempt administrative employee. A jury agreed he deserved overtime pay. The question remained whether the award should be doubled as a penalty for misclassifying Feniger.

The court concluded that the owner hadn’t acted in good faith because she took no steps to learn about the FLSA. She testified she never knew she had to comply with the law and never asked anyone for advice. Since she was willfully ignorant of her obligation, the court doubled Feniger’s jury award. (Feniger v. Café Aroma and Lamay, No. 2:05-CV-319, MD FL, 2007)  

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