The federal Fair Labor Standards Act, which regulates overtime pay, has for decades been a challenging obstacle course for managers. While revisions in 2004 went some way to make thea little easier from the employer's perspective, many managers still make mistakes that end up costing their companies dearly.
Here are some of the most common pitfalls to avoid, according to Workforcemagazine:
"Salaried" doesn't equal "exempt." Unless workers meet the specific criteria for one of the various FLSA exemptions, they are entitled to overtime pay (time-and-a-half for hours over 40 worked in a single week). Not all salaried employees are exempt, and not all hourly employees are eligible.
Not all "managers" are managers. Job titles don't matter either under the FLSA. The law is specific about the authority and responsibility a manager needs to have to be covered by the "executive exemption." A front-line supervisor or an assistant manager, even if paid a salary, may not qualify.
Clock out for lunch. It's easier to prevent hourly employees from working off the clock than it is to prove that they weren't working when they were on the clock. Make sure your meal-break procedures reflect this.
"Unauthorized" doesn't matter. The FLSA does not care whether you approved overtime in advance. You can discipline employees for violating policy and working unauthorized hours, but you can't avoid paying them overtime.
Overtime is not optional. That means overtime can't be waived by the employee, either. You can't make a deal where an employee works extra hours to earn more money, but at the regular rate of pay. Such agreements are void if you're taken to court or audited by federal regulators.