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Can you avoid overtime disputes with your workers?

The oil and gas industry is hard work, and commonly requires employees to work over 40 hours a week. Long days can lead to pay dissatisfaction, and raise the question of overtime pay. Unfortunately, you and your employees may disagree on the level of compensation that they are entitled to. What can you do to avoid employee frustration and overtime disputes?


How is overtime decided?

The state of Texas determines overtime pay with the Fair Labor Standards Act (FLSA). Following FLSA, nonexempt employees are entitled overtime pay at a rate of 1.5 times their regular salary when they work over 40 hours within a 7 day period. The act does not require extra pay for weekend or night work. Additional pay for undesirable hours is up to the discretion of the employer.

Not all employees are entitled to overtime work. An employee's salary, position classification and daily duties influence whether they are eligible for overtime pay. Visit the United States Department of Labor website if you would like more information on who is entitled to overtime pay.

What causes overtime disputes?

Overtime disputes can occur when a company knowingly withholds pay from its workers. However, disputes commonly arise due to confusion between employers and employees, and can be avoided. Some common areas of confusion include:

  • Workers mistakenly believe that they are qualified for overtime pay
  • Employers and employees disagree over the number of hours an employee has worked
  • Employees do not understand how their pay check was calculated
  • Employees expect to be paid more for working undesirable shifts

How can you prevent disputes?

  • Discuss compensation: Make sure that employees understand compensation when you extend a job offer. Your employee should know whether they are eligible for overtime. Your company's compensation policies may differ from the FLSA. If so, make sure that employees understand their legal right to compensation versus company policies. For example, you may double employee salaries if they work nights, but this is not legally required.
  • Communicate with management: Managers need to know when employees are working over their 40 workweek. In order to keep track, have employees contact their manager if they will be working over 40 hours that week. If you would like to avoid paying overtime, add manager approval restrictions so that employees are not allowed to work over 40 hours unless they are specifically granted manager approval.
  • Record overtime hours: Have employees record how many hours they work each day. Separately record standard working hours and overtime hours. Submit work hours either daily or weekly to ensure that they are accurate and timely.

Disputes arise when the company's expectations do not match the employee's expectations. To avoid disputes, keep open lines of communication. Make sure that your workers understand the FLSA, your company's compensation policies and how many hours they are working each week.

If you need help resolving an overtime pay dispute, consider contacting an attorney who can help both parties understand their legal rights, and reach an agreement.

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