Compensating Overtime Employees Here's why one entrepreneur hired on an HR person to take care of overtime pay.
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Ben Wolin sometimes pays hourly employees time and a half. "We have some employees who are subject to overtime pay," says Wolin, 33, co-founder of 6-year-old Waterfront Media, a New York City firm that operates 15 health and wellness websites.
But overtime pay is a growing area of litigation. According to the Department of Labor, back wages for overtime violations represented about 89 percent of all back wages collected in 2006. And employers who lose in court could end up paying both damages and plaintiffs' legal fees. As a result, most overtime cases settle out of court.
The Federal Labor Standards Act governs federal overtime law. "You'll hear the [plaintiffs' lawyers] joke that FLSA litigation is like shooting fish in a barrel," says Lee Schreter, an employment law partner at Littler Mendelson. "It's frustrating for employers because it's very hard to get in compliance." Here are a few tips for paying overtime properly:
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