Under the Fair Labor Standards Act nonexempt employees must be paid overtime for any work after 40 hours a week at 1.5 times their regular rate. But what if your employees agree to forgo the higher rate just so they can get more hours?
Jon Hyman, a partner in the labor and employment group at Kohrman Jackson & Krantz, discusses on the Ohio Employer’s Law Blog this scenario, which played out at a security company.
According to Cleveland.com, Citywide Protection Services got into trouble because it allowed its employees to volunteer for overtime at their regular rates, and it has agreed to pay $14,760 in back overtime pay to 30 security guards following a Department of Labor investigation.
Hyman says the company president said all he was trying to do was help his employees who needed extra money. The president reportedly told them he couldn’t afford to pay overtime before they worked the hours.
“It does not matter whether your motives are altruistic or malicious when avoiding overtime payments,” Hyman writes. “If a non-exempt employee works more than 40 hours in a week, you must pay them overtime. Period.”
That’s the only way to avoid a DOL investigation or a collective lawsuit, Hyman says.