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What to do if Your Overtime Claims are on the Rise
by Jeff Mollet

The overtime issue just seems to hang around like a bad cold. After years of litigation and new legislation aimed at clarifying the rules and reducing litigation, employee overtime claims still seem to be on the rise. As more information is disseminated, employees who are only now learning of the rights they have (or had) are calling their attorneys to see if they are entitled to more from their employer. On the other side, employers who were probably unsure of the overtime rules in the past are now certain they are unsure of what the new rules say and how it may affect their business. The result of the “new and improved” overtime legislation may be nothing more than partially-regulated chaos.

Adding to the confusion is that around 18 states currently have some form of labor law that supersedes the new federal guidelines. This leaves employers wondering whether what they read or hear through their business associations and networks is even applicable. Not surprisingly, labor law is a hot career. Employers clearly need to learn where they stand to avoid potential pitfalls and claims in the future.

Manager’s Toolbox

What can you do? Same old thing: learn, plan and prepare.

1. Read about the new rules. Get a synopsis from your business association or do some online research. This will give you an idea of what you might need to think about and in what direction to move.

2. Hire appropriate professionals to help. Don’t try to use an online form service or copy your neighbor’s documents. One size fits all does not work where the underlying questions will be about how your particular business operates and what your employees’ duties are.

3. Put a plan in place and stick to it.

4. Review and update your overtime policy, your employment policy and each of your employee files annually. Finally, remember to keep records of employee meetings and annual reviews.

According to the U.S. Department of Labor, there may be more than 1.3 million employees falling under the new overtime eligibility rules who were previously ineligible. If an employer is striving for compliance as a method of controlling liability, knowledge of the rules and adoption and enforcement of specifically tailored policies is a must.

As usual, the new federal regulations are lengthy, complex and partially incoherent. There are, however, some basic revisions and additions to the law worth noting. One of the most obvious changes relates to the “job title” exception. Under the old rule, certain supervisors and managers were exempt from the mandatory overtime regulations. Smart employers picked up on this and created more supervisory and manager positions. The new laws, however, recognize the employers’ actions and the use of job titles as an exemption mechanism has been removed.

The new focus is on the job duties of the employee in question. Once the employee’s “job duties” are known, the possible exemption can be determined. Therefore, the onus will be on the employer to prove the employee in question has the type of daily job duties that make the employee exempt from the overtime rules. These job duties are familiar, and are what one would normally associate with the old “job titles” of the prior rules. Does the employee for whom an exemption is sought have the power to hire others? To fire others? Does the employee work at the same task as those they oversee? How much discretion do they have?

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