TOP MYTHS E m p l o y me n t
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Employment law myths surrounding overtime and minimum wage laws.
Shutterstock/ Maksim Fesenko
By Robin I. Frank
Many business owners—particularly those in the nightlife and hospitality industries—wrongly assume that if an employee works overtime without advance approval, in violation of a written policy, they do not have to pay for that overtime. This is not the case. A supervisor who knows that the employee barbizmag.com
is working overtime is liable and must pay for that overtime. Disciplining the employee for violating the policy may be in order, but not paying is not an option. Many nightclub owners do not maintain accurate time records. In the overtime context, it is the employer’s obligation to keep and maintain accurate
Staffing time records (a work schedule does not constitute an accurate time record). For nightclubs with multiple facilities, even if under different corporate names, when employees work at different locations in a single work week, you may be required to aggregate the employee’s time worked at both locations in order to ensure that proper overtime is being paid. If the employee works 20 hours at one location and 30 at another in the same workweek, the hours must be combined such that the employee would have worked 10 overtime hours in that week. In this situation, the payroll systems for both locations should be coordinated to ensure proper compliance with the overtime laws. And the bar should never require an employee, such as a hostess or bartender, to work off the clock or reduce their hours worked to keep labor costs down. If, for example, a service bartender sues for overtime because of an especially busy or crowded time, and there are no accurate time records, the law allows the employee to merely estimate the number of hours worked. This could be as simple as the employee stating that she worked an average of “X” number of hours per week. Moreover, if she recovers even one penny in unpaid overtime, the owner more than likely will be required to pay double that amount as a penalty. The overtime law also requires the employer to pay the employee’s reasonable attorney’s fees if the employee wins. If the employer wins, in most cases, the costs cannot be recouped. The federal overtime law is an extremely unforgiving law for employers and is almost entirely skewed in favor of the employee. For example, owners or individuals who have the authority to hire, fire, and set pay rates and/or work schedules can be held liable for unpaid overtime and minimum wages, regardless of whether the restaurant is an LLC, S corp., etc. Additionally, successor companies are often substituted in after the fact. So closing down the restaurant or bankrupting it is not an effective solution. Another problem area is misclassifying employees as exempt from the overtime laws, an issue that is not uncommon February 2019
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