The new overtime law will take effect January 1st, 2020. Overtime is one of the most frequent employer pay mistakes in business. Regardless of how the new change affects you, now is a good time to look at your overtime pay and make sure you’re in compliance with the overtime wage laws. Here are some of the most common overtime errors and how to avoid them: 

Incorrectly Giving Employees Exempt Status 

Whether you do this intentionally or unintentionally, incorrectly classifying employees as exempt from overtime is a violation of the Fair Labor Standards Act (FLSA). Simply paying an employee a salary does not mean they are legally exempt from overtime. The regulations are complicated. Make sure you understand the difference between exempt and non-exempt classifications. 

Misclassifying Independent Contractors 

Independent contractors are not covered by the FLSA and therefore are not required to be paid overtime. However, figuring out if someone is an independent contractor or not can be difficult. Here are some ways to tell the difference.  

Not Counting ALL Hours Worked 

Yes, all of them. You can’t make employees work off the clock or refuse to pay unapproved overtime. Employees can’t agree to work overtime with normal pay or take time off in trade of overtime pay. Every hour worked must be accounted for and payed for correctlyThis includes any bonuses, premium pay, and other payments.  

Keeping track of employees’ hours is your responsibility. Be aware of any automatic break deductions. Employees can choose to work over those breaks, and you are still responsible for paying them for those hours.  

Avoiding overtime pay mistakes can be tricky, especially with the changing law. Use these tips to keep your overtime pay in compliance with FLSA laws.