To pay or not to pay? Overtime issues

November 30 , 2007

Excerpted from Arizona Employment Law Letter, written by attorneys at the law firm Ford & Harrison LLP

by Justin Pierce

Q: We recently learned that a manager strongly "suggested" that his hourly employees not put in for overtime that they worked. This has gone on for almost 18 months. Needless to say, the manager has hit the road, but what should we do? Can we just pay the employees what we owe them and get them to sign a release?

A: You really are in a pickle. The good news is that your employees won't be able to make a claim for back wages that are over a year old. But that still leaves you with the previous 12 months. Unfortunately, if you were to get a release from your employees, it wouldn't be enforceable. Employees can't waive claims they might have for wages. And the U.S. Department of Labor (DOL) could still file an action against you -- even if you pay the wages. So you have a few options.

First, you could pay the employees what you owe them. That probably would be good for morale (especially if you pay the full 18 months -- more than legally required). That way, you can get them to sign off on the payment. While it isn't a release, it will probably make the employees put this issue to bed.

And if the issue is brought to the DOL's attention, the department will be pleased that you took the initiative and paid the back wages and hopefully will have bigger fish to fry.

Option two: You could just cross your fingers and hope that no one raises the issue. With each day that passes, your liability will decrease. Then, if someone raises the issue, you could resort to option one. But if the DOL gets involved and finds out that you knew about it and did nothing, it won't be as happy with you.

The fact is that your former manager really put you in a tough spot. Your options are limited, and neither is really that attractive. In all likelihood, the nature of your business will govern your decision.

In this monthly column, attorney Justin Pierce answers your workplace questions "just in time." If you have a question you would like him to answer, send an e-mail to jpierce@fordharrison.com or call him directly at (602) 627-3505.

Copyright 2007 M. Lee Smith Publishers LLC. This article is an excerpt from ARIZONA EMPLOYMENT LAW LETTER ARIZONA EMPLOYMENT LAW LETTER should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only. Anyone needing specific legal advice should consult an attorney. For further information about the content of any article in this newsletter, please contact any of the editors.___________________________________________________________________

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• Basic Training for Supervisors: Wage and Hour Law - This booklet delivers in plain English a quick but thorough review of wage and hour legalities and marks the territories to avoid when screening potential employees.
• HRIQ - Wage and Hour Law
  

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