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4 mistakes employers should avoid when it comes to overtime

There are many demanding occupations that require workers to put in more than 40 hours of time in a given week. When this happens, it is crucial for employers to know if they should be paying overtime to their workers, and how much to pay them. 

Unfortunately, employers can make mistakes. And whether missteps are intentional or accidental, they can trigger a lawsuit which can be quite costly for a company. As such, it is important to avoid overtime mistakes, including the four common types we explain below.

  1. Misclassifying workers - Workers who are exempt from overtime are not entitled to extra pay for hours worked over 40. However, employers cannot classify workers based on whether they want to pay overtime or not. Under the Fair Labor Standards Act (FLSA), there are tests that dictate whether an employee is exempt or nonexempt. Ensuring you properly classify workers is a critical step in avoiding overtime disputes.
  2. Not paying enough - There are also strict rules for how much an employee should receive for overtime hours. Federal and state law dictates that employees receive at least one and one-half times their regularly hourly rate for every hour over 40 worked in a workweek. If you do not meet this threshold, you could face legal claims by an underpaid employee.
  3. Keeping poor records - To ensure you properly compensate employees -- whether they work overtime or not -- you must keep accurate records every single week. This includes regular hours, overtime hours, breaks, protected leave and time off. This allows you to properly calculate what, if any, overtime pay is necessary. 
  4. Hoping employees will not notice - If there is a mistake and employees do not receive deserved overtime, waiting and hoping no one will notice or care would be a big mistake. Instead, address the oversight as quickly as possible to minimize any adverse fallout.

Overtime pay is crucial for eligible employees who work more than 40 hours, and properly compensating workers is a crucial responsibility for Texas employers. If any questions or concerns arise regarding overtime pay or eligibility, it is wise to resolve the issue as quickly as possible and with the help of an experienced attorney. 

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