Overseeing a layoff can be stressful and hectic. Plus, you’re dealing with angry workers who are more prone to sue. There’s one step you’ll want to take to make sure you’re protected.
Take a look at the list of employees slated to be let go — even if it’s only one or two — and ask yourself or HR, “Are any of these people in a gray area when it comes to being paid overtime?”
Every employer has them: workers who have been classified as salaried and exempt from overtime pay, but whose situation is iffy.
How about that fill-in, part-time manager we’ve had on salary? Or the administrative assistant whom we’ve been calling a “manager.” Or the IT worker whose knowledge and skill level put him close to the “professional” status – and exempt from overtime?
Best bet: If you’ve been treating them as exempt, and there’s the hint of a question about whether the classification is correct, you may want to sit down with your financial officer and consider whether the classifications were correct and in line with the Fair Labor Standards Act (FLSA).
Reason: If one of those people suspects cheating – and a shortchanged paycheck – expect a lawsuit or a complaint to the Labor Department. And the penalties are stiff for violators. An employee winning such a claim would be entitled to up to three years of unpaid overtime, which would be doubled, plus attorney’s fees.
However, the Labor Department generally is a lot more lenient with employers who go back and make things right before there’s a complaint. So it may be worthwhile before the layoff to see if mistakes have been made.