Peggie is one of the most trusted and valued employees of ABC Corp., where she works as a receptionist.
She always has a kind word for her coworkers. She comes in early and stays late.
Peggie always answers the phone on the second ring – even during lunch – which she eats at her desk. She takes work home so she never gets behind.
Happy in her job and beloved by her co-workers, Peggie is the heart and soul of ABC Corp.
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But Peggie may also be her employer's biggest liability.
If ABC Corp. failed to pay Peggie for all the hours she worked, including overtime, it could be faced with a costly Department of Labor investigation or a civil lawsuit. While Peggie is a hypothetical example, there are plenty of real-life Peggies out there. Maybe there's one in your office.
Of all the laws governing the workplace, the wage and hour regulations are among the most complicated. Worse still, the state and federal wage laws provide severe penalties and awards of attorneys' fees against employers who pay incorrectly.
Confusion about the requirements causes even the most well-meaning employers to incur substantial expense proving a violation was unintentional.
One of the most common mistakes employers make is misclassifying employees as being exempt from overtime. Many incorrectly assume that overtime is not required for employees paid a salary.
In fact, only certain types of employees, such as executives and professionals, are exempt.
Since Peggie spends most of her time answering the telephone, making copies and running errands, she is entitled to be paid overtime for each hour worked over 40 in a week – even though ABC Corp. does not pay her as an hourly employee.
This raises the question of how many hours Peggie works. ABC Corp. does not keep records of her hours because it treats her as a salaried employee. In the absence of such records, courts often accept the employee's own estimate for the purpose of calculating wages and overtime.
Adding together all the unpaid wages, penalties and Peggie's attorneys' fees (Peggie's enthusiasm for work dampened considerably when she realized she had been systematically underpaid, so she got a lawyer), and its own attorneys' fees, ABC Corp. could face a financial loss much greater than the amount it originally owed.
The burden is always on the employer to pay wages correctly.
Fortunately, there is help available for employers.
Some of the best resources are the individuals who work at the state and federal departments of labor (www.nclabor.com and www.dol.gov).
Another great resource is the Employers Association (www.employersassoc.com).
Stephen J. Dunn is a partner in the Charlotte firm Van Hoy, Reutlinger, Adams & Dunn.