Off The ClockHow to avoid costly mistakes in calculating and paying overtime
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The basic concept of overtime sounds pretty simple: Employeeswho work more than a certain number of hours get paid at a higherrate for the extra hours put in. The actual practice is far morecomplex, however, with a lot of gray areas to consider. And makinga mistake could hurt later in back pay and penalties if you getcaught, says Steve Milner, a managing partner with Squar Milner, anaccounting firm in Newport Beach, California.
Milner says the most common mistake employers make when it comesto overtime is in how they classify employees. Essentially,employees are either "exempt," which means overtime rulesdon't apply, or they're "unexempt," which meansovertime rules do apply. Milner says administrative workers insmaller businesses are often misclassified as "exempt"when, because they lack supervisory duties, they should be"nonexempt."
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