Overtime pay laws protect employees from unfair wages, but many employers make costly mistakes that lead to unpaid wages and legal trouble. If your employer doesn’t follow the law, you may deserve compensation. Here are common mistakes employers make when handling overtime pay.
1. Misclassifying employees as exempt
Some employers wrongly classify employees as salaried exempt to avoid paying overtime. The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees overtime for hours worked over 40 in a workweek. Georgia follows federal law on this issue, so misclassified employees can claim back pay.
2. Failing to count all hours worked
Employers must include all time spent working when calculating overtime. This includes working before or after shifts, short breaks, and time spent on job-related tasks outside regular hours. When employers ignore these hours, they underpay employees.
3. Improperly averaging workweeks
Some employers average hours over multiple weeks to avoid overtime. For example, if an employee works 30 hours one week and 50 hours the next, the employer may claim the average is 40 hours per week. However, overtime calculations must happen weekly, so employees must receive overtime pay for any week exceeding 40 hours.
4. Requiring off-the-clock work
Employees should receive pay for all work performed. Some employers pressure workers to finish tasks before clocking in or after clocking out, which violates the law. If an employee works, the employer must pay for it.
5. Miscalculating Overtime Rates
Overtime pay must be at least 1.5 times an employee’s regular rate. Some employers calculate overtime based only on base wages, ignoring commissions, bonuses, or other earnings. This results in underpayment.
6. Retaliating against employees for overtime claims
Some employers punish workers for claiming overtime pay by cutting hours, demoting them, or firing them. Federal and Georgia law prohibit retaliation against employees who assert wage rights.
7. Failing to keep proper records
Employers must keep accurate records of hours worked and wages paid. When records contain errors or go missing, employees may struggle to prove unpaid wages, but the law holds employers responsible for maintaining correct documentation.
Overtime laws ensure fair pay practices. Employers who violate the law may owe workers unpaid wages and damages.