Mistakenly overlooking overtime hours or simply misclassifying an employee can quickly become expensive, especially when multiple employees are involved or when the problem is systemic. The U.S. Department of Labor reports that collection of back wages under the Fair Labor Standards Act (FLSA) increased 21 percent from 2009-2015, averaging $8,900 per investigation.
In many of these cases, the companies probably violated the law unknowingly, or even with the best of intentions, according to Noam Yalon, president of 941 Timekeeping.
“A supervisor simply trying to accommodate an employee who needs a weekend off may fail to realize that when that individual makes up those hours during the week before or the week after, that could be overtime.” Yalon says. “If you’re going on a word and a handshake, or even just relying on a timecard, it’s easy to overlook this obligation when doing payroll. This is more of a management issue than a compliance issue.”