The importance of avoiding FLSA violations for startups
The costs associated with a lawsuit over time and attendance pay can sink a small business. Despite this, violations of the wage and hour provisions of the Fair Labor Standards Act are common among startups.
Specifically, mistakenly exempting workers from overtime is an often-heard grievance in employee attendance compensation cases. Under federal law, workers who may be legally exempt from being paid overtime are generally salaried workers who perform duties that are administrative, executive or managerial in nature.
Miscategorizing workers, be it accidental or deliberate, may save a company money at the time but could result in costly litigation later. If the United States Department of Labor's Wage and Hour Division mounts an investigation that exposes FLSA violations such as insufficient record-keeping practices and overtime misclassifications, the offending company may have to reimburse workers for unpaid wages, overtime back pay, liquidated damages, attorney's fees and interest.
Because of this, companies should be aware of the federal and state laws that pertain to them and their employees, and take care to abide by them.
Specifically, mistakenly exempting workers from overtime is an often-heard grievance in employee attendance compensation cases. Under federal law, workers who may be legally exempt from being paid overtime are generally salaried workers who perform duties that are administrative, executive or managerial in nature.
Miscategorizing workers, be it accidental or deliberate, may save a company money at the time but could result in costly litigation later. If the United States Department of Labor's Wage and Hour Division mounts an investigation that exposes FLSA violations such as insufficient record-keeping practices and overtime misclassifications, the offending company may have to reimburse workers for unpaid wages, overtime back pay, liquidated damages, attorney's fees and interest.
Because of this, companies should be aware of the federal and state laws that pertain to them and their employees, and take care to abide by them.
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