2 causes of unpaid overtime claims

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As an employer and business owner, you must follow federal and state employment laws. By failing to comply with these laws, your business could face many legal and financial repercussions.

For example, your employees likely have the right to overtime pay, which increases to one and one-half of what you already pay them. You likely don’t want to pay overtime every day, which is understandable, as this can cost your business a lot in a short time. So, you’ve likely considered many options to reduce how you can minimize overtime pay while still allowing your business to run optimally.

Operating your business with the wrong practices could create issues. If your employees believe that they’re being taken advantage of while working overtime without getting paid, for example, your company could face unpaid overtime claims. Avoid these risky practices to minimize the likelihood that your workers will file claims against your business for unpaid wages.

Setting a no-overtime policy without exceptions

At present, your business may enforce a no-overtime policy. In other words, your business may have a stance that states your employees can only work the max amount of hours in a shift or workweek without going into overtime pay.

In theory, this policy could help to ensure that you’ll never have to pay overtime. While the reality is that you may struggle to enforce such a rule. If your workers do work overtime, which is always a possibility, then you’ll have a legal obligation to pay them for their time. A no-overtime policy, typically, can’t overrule federal employment laws.

Off-the-clock work

It may seem like the easiest way to avoid paying overtime is by having employees work off the clock. For example, having an employee stay after hours to finish work or to clean up or having an employee show up to a shift early will very likely have an employee asking for overtime pay. Even small increments of off-the-clock work can quickly add up and you’ll likely have to pay your employees for their work.

If you’re facing a worker wage claim, then, as a business operator, you need to be aware of your legal rights. When seeking legal guidance, don’t hesitate to ask for assistance in setting policies that will mitigate your company’s risk of additional wage claims in the future.