HR Management & Compliance

Overtime Compensation: Employer Dodges Claim For Back Pay; Defensive Steps To Take Now

Defending against an employee’s claim for overtime that you didn’t even know they had worked can be frustrating and expensive. And if you lose, you could be on the hook for up to three years of back overtime plus penalties. We’ll review a recent case involving a Fresno employer who managed to win this type of case. We’ll also look at the importance of having a strong overtime policy and good recordkeeping practices.

Employee Balks At Overtime Policy

Lenora Spencer worked as a legal secretary for the law firm of Quinlan, Kershaw & Fanucchi. The firm said it had a written policy requiring employees to get their supervisor’s approval in advance for overtime. But Spencer felt she should be able to work overtime without permission. Spencer reportedly called in sick one day. She then phoned again the next day to say she had to attend to personal business the rest of the week and made a vague statement that she should be replaced. It also appeared that she had cleared out her personal items from her work area. Because Spencer had quit twice before, the firm assumed she had resigned and sent her a letter accepting her resignation.


The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.


Employee Won’t Give Up

Spencer filed a $23,000 claim with the Labor Commissioner for overtime going back three years. When it was rejected, she hauled her former employer into court, charging that she had been terminated in anticipation of her making an overtime claim. The law firm contended that Spencer wasn’t fired, but quit, and that while she was employed there, she never mentioned that she was owed overtime. In fact, the firm argued, its records reflected that Spencer was always paid for overtime even if the work wasn’t preauthorized.The jury ruled against Spencer, and the court ordered her to pay the law firm $16,000 in attorneys’ fees.

3 Defensive Steps

Although the employer in this case successfully dodged the employee’s overtime demand, these claims can result in hefty awards and penalties, not to mention the attorneys’ fees you may have to shell out to defend yourself. Here are some practical ways you can protect yourself:

     

  1. Don’t tolerate policy violations. Your overtime policy should clearly state that nonexempt employees may not work overtime without prior written authorization. If an employee violates the policy, take immediate disciplinary steps. Note, however, that the law says you must pay for any overtime worked even if it’s unauthorized.

     

  2. Keep track of all hours. Have all nonexempt employees – including those on salary – track their work hours using time sheets or some other method. You are required by law to keep these records, and they will give you the evidence you may need later to refute a claim that you failed to properly pay overtime.

     

  3. Don’t retaliate. It’s illegal to retaliate against an employee who complains about alleged illegal wage and hour practices. If you do have to discipline someone who has complained, be sure to keep detailed records that support your legitimate reasons for doing so.

 

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