Thursday, October 19, 2006

Ballooning Overtime Claims

Images_87 Thanks to Adam Savett for this link to Pain-and-a-Half, by John Goff, at CFO.com:

According to the Administrative Office of the U.S. Courts, there were more than 4,000 FLSA-based civil suits filed last year. That's a nearly 50 percent increase over the number of wage-and-hour cases filed in 2003 –  the year before the DoL revised the law.

Some of the trouble stems from a common misconception that if an employee is salaried, overtime pay goes out the window. Given that many employees ask to be salaried (perceiving it as a status-booster) and managers are often happy to comply (seeing it as a way to save money), a potential problem may balloon until a lawsuit comes along to pop it.

Some employers try to dance around the issue by giving salaried workers lofty titles that suggest plenty of managerial discretion, when in fact the employee has none. But "the first thing the DoL will do when evaluating whether an employee is properly classified as exempt or nonexempt is look at the employee's job description and the actual tasks the employee performed – not the job title."

Another common misstep is the creation of special accommodations for an employee, such as flexible work hours or trading comp time for extra hours worked.  Even though the arrangements often benefit the employee, as Bill Coleman, chief compensation officer at Salary.com, notes, "they don't override the Fair Labor Standards Act." [Moreover, supervisors often have an incentive to look the other way.]  Off-the-clock arrangements tend to boost productivity, which makes a supervisor look good.

rb

https://lawprofessors.typepad.com/laborprof_blog/2006/10/ballooning_over.html

| Permalink

TrackBack URL for this entry:

https://www.typepad.com/services/trackback/6a00d8341bfae553ef00d8345e62d969e2

Listed below are links to weblogs that reference Ballooning Overtime Claims:

» "Pain-and-a-half" from PointOfLaw Forum
John Goff in CFO magazine on the boom in overtime litigation: "Some of the trouble stems from a common misconception that if an employee is salaried, overtime pay goes out the window. Given that many employees ask to be salaried... [Read More]

Tracked on Oct 24, 2006 9:35:26 PM

Comments

Post a comment