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Work Overtime to Ensure That Your Unauthorized Employees Do Not

BY Michael C. Schmidt
July 31, 2008

Consider the following hypothetical scenario:

  • Your company policy states that a non-exempt employee cannot work overtime, unless the employee receives prior written approval.
  • Your company policy says that an employee who works overtime that is not authorized can be subject to discipline up to, and including, termination of employment.
  • Your company did not believe that its non-exempt employees worked overtime hours.
  • The overtime hours worked by non-exempt employees were unauthorized.
  • Your company is found liable for significant unpaid overtime wages.

This situation is not so far-fetched, particularly after the federal Court of Appeals in New York ruled earlier this year that an employer cannot necessarily avoid liability for overtime wages ' even if its policy requires prior approval for overtime work, and even if the employer did not have actual knowledge that its employees were working overtime hours. This article looks at the surge in overtime litigation, the court's recent decision and steps for limiting your company's potential exposure.

A Surge in Overtime Litigation

As we have passed the mid-way point of 2008, it is clear that wage and hour lawsuits continue to dominate a large portion of all new cases filed in court each day. This noticeable surge will continue, if not further increase, as current and former employees claim in increasing numbers that they have been classified improperly as 'exempt' employees, and thus are owed overtime premium pay. These cases are often prosecuted through class action lawsuits, where the existence of multiple plaintiffs raises the potential for significant exposure to the employer.

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