For a while I could not understand why so many employers violate basic overtime laws. After all, these laws are not rocket science, and plenty of resources are available for employer to understand and make sure that they comply with the rules of the Department of Labor Standards Enforcement when it comes to overtime compensation.
Recently, I represented an employer at a hearing in front of the labor commissioner. The employer was clearly liable for some overtime to several of his employees, and my job was mostly mitigating that liability rather than denying it. I was also curious to find out why the employer did not bother to contact me or another employer attorney before hiring workers to make sure that he pays out compensation correctly. The answer was very simple: the employer was not aware of who the overtime laws apply, didn’t really care to find out, and honestly thought that the likelihood that he was going to have to deal with the issue in court was very low.
All of the above assumptions were mistakes on the part of the employer, especially the last part about the “likelihood.” Having hired over 10 workers for a project of 3-month duration and having had to unexpectedly terminate the project due to some cash-flow issues, he was guaranteed to turn his hard-working employee to disgruntled workers, left without the expected earnings from the project, who will do whatever they can to obtain additional compensation after being unexpectedly terminated. Naturally, they turned to the labor board to find out if they can “squeeze” some overtime from their employer.
This was yet another example that it is well worth for the employer to seek counsel to assure compliance with the basic overtime laws, as liability for such violations is far greater than any expense of seeking legal advice to prevent such a liability.