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One of the costliest mistakes an employer can make is failing to properly pay overtime, which can result in liability not just for the unpaid overtime but also liquidated damages and attorney fees.
One of the more frequent ways employers fail to comply with legal requirements occurs when categorizing employees as salaried and then neglecting to pay overtime.
On February 22, 2023, the U.S. Supreme Court decided Helix Energy Solutions Group, Inc. v. Hewitt, in which a former employee sued for unpaid overtime, alleging he worked up to 84 hours per week. The employer argued that the employee was exempt from overtime because he was a salaried employee making over $200,000 per year. Unfortunately for the employer, however, the Supreme Court held that the employee’s compensation was based on a daily-rate basis and, under the facts of the case, he did not meet the legal definition of a salaried employee. As a result, the employer was liable for substantial unpaid overtime and other damages.
The lesson to be learned from this case is the importance of making sure that your compensation system for salaried or other exempt employees meets the legal requirements of federal law. Issues to explore include whether an employee falls into a category that can be treated as a salaried employee, whether the employee is actually paid on a salary basis and whether the employee’s actual job duties comply with the regulatory requirements.
How Kennedy Berkley Can Help
Experienced legal counsel can help you avoid costly mistakes with respect to wage laws and other aspects of the employment relationship. Kennedy Berkley can provide support with drafting personnel policies and job descriptions, as well as assisting with audits and reviews by state and federal agencies. In addition Kennedy Berkley is available to answer specific questions and concerns as they arise on a day-to-day basis.
To discuss overtime compliance or other employment issues, please contact Larry Michel at lmichel@kenberk.com or (785) 825-4674.