The federal overtime law applies to employers regardless of the number of employees. Moreover, employees cannot waive their right to overtime — period. Even if a worker signs a contract agreeing that he or she will not be paid overtime, that individual can still file a legal claim for the unpaid overtime. This is why employees sue employers for unpaid overtime or minimum wage violations more often than for any other reason.
Many employers 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. If you know or have reason to know the employee is working overtime, you are liable and must pay for that overtime. You can, however, discipline the employee for violating the policy.
Many landscape company managers also do not maintain accurate time records. In the overtime context, it is the employer’s — not the landscape worker’s — obligation to keep and maintain records of the hours worked. And, no, a work schedule does not constitute an accurate time record.
Moreover, if an employee recovers even one penny in unpaid overtime, you more than likely will be required to pay double that amount as a penalty. The overtime law also requires the employer to pay both their own and the employee’s reasonable attorney’s fees if the employee wins. If you win, you are still responsible for your own attorney’s fees in most cases.
The federal overtime law is an extremely unforgiving law for employers and is almost entirely skewed in favor of the employee. For example, even if an employee is an undocumented immigrant, and therefore does not have the legal documentation to work in this country, the employee can still sue for unpaid overtime and you are required to pay him or her. This is of particular concern to landscaping companies. According to a 2012 study by the Pew Research Center, undocumented immigrants represented 22 percent of workers in “professional, business and other services,” which includes landscaping.
You, as the employer, may also be subject to penalties for hiring an undocumented worker in the first place. And, you may be liable for unlawful retaliation if you report this employee to the immigration authorities.
Further, whether you are an owner or just an individual who has the authority to hire, fire and set pay rates and/or work schedules, you can be held individually liable for unpaid overtime and minimum wages. This is true whether your company is an LLC, S corporation, or some other legal entity. This means that you, as the owner, can be individually named in a lawsuit and your personal assets can be on the line if a judgment is entered in favor of a yard crew member.
Successor companies are often substituted after the fact. So closing down the business or bankrupting your landscaping company is not an effective legal solution or defense.
Another problem area is misclassifying employees as exempt from the overtime laws. “Classifying” employees as exempt does not guarantee that the law will see them as such. Paying someone a salary or appointing him or her a crew chief does not mean the employee is not entitled to overtime. Being paid a salary for being the foreman, without the required duties to render the foreman exempt, simply changes how the law calculates the overtime rate – it does not avoid the need for overtime pay altogether.
Likewise, only certain types of jobs are exempt from the overtime requirements. While an employee must be paid a certain salary in order to be exempt, the exemptions focus on the employee’s day-to-day duties and responsibilities, and not the job title.
The same goes for paying employees on a day rate. The fact that you pay a landscape worker or groundskeeper a set amount per day or for a set number of hours has nothing to do with whether that employee is entitled to be paid overtime. For example, if a lawn mower operator works more than 40 hours in one workweek, then that person must be paid overtime. The pay rate – salary, hourly, weekly or daily — simply dictates how you calculate the overtime compensation and whether the employee must be paid overtime at a time-and-one-half rate or half-time rate.
Finally, one of the biggest problem areas for landscape businesses is whether to pay for travel time, lunch breaks and knowing when the work day starts and stops. Let’s say you require your employees to come to the office in the morning and drive in a company vehicle to the first residential development or commercial property. For purposes of calculating the total hours worked by the employee, the day begins when they climb in the truck and ends when the vehicle returns at the end of the day. If the employee does any work while at the office before leaving or after coming back, then the work day starts and ends at that point in time.
On the other hand, if the employee is free to meet the rest of the landscape crew at a community gate or building parking lot, or can voluntarily catch a ride from the office, then you do not need to pay that employee for the travel time. The employee’s workday begins when he arrives at the job site. Moreover, any travel time between properties throughout the work-day must be compensated. Lastly, any breaks that last less than 20 minutes must be paid.
Any breaks, such as lunch breaks, which last for more than 20 minutes do not have to be paid, as long as the employee is not doing any work during that time. That’s less likely to happen when a landscaping crew is trying to catch up following a day of inclement weather, so you can’t assume it happens every day.
Therefore, you should not automatically deduct for lunch or other breaks. Many times, employees claim in court that they did not take a lunch break and deducted hours should have been paid.
With the above in mind, you might be wondering about the real-world implications for your landscaping business. I have had many lawn care companies as clients that have been sued for unpaid overtime because they automatically docked employees’ lunch hours without making the employees clock in and out for meals. Other clients were sued for unpaid overtime because they didn’t keep time records — they just had a work schedule — and the employees alleged that they worked on properties more hours than scheduled.
My clients, on the other hand, alleged that in many weeks, the employees worked less than scheduled due to finishing a job early or stopping because of bad weather. However, since my clients did not have any records to prove this, it made it much harder to establish that the employees were not being truthful.
I’ve had other clients who were sued by their site supervisors. These “supervisors” were paid an hourly rate, so the fact that they actually supervised other employees was irrelevant. They were entitled to overtime just like their yard workers.
And I’ve had clients who were sued for unpaid overtime based on nothing more than the unpaid travel time employees incurred driving to the first property and back to the office after the last job. Whether those employees were entitled to unpaid overtime compensation depended on whether they drove themselves or were required to ride a company vehicle to the first property.
How these cases were resolved depended entirely on the quality of the records my clients maintained and whether they, in fact, were complying with the overtime laws. All of my clients claimed the employees were lying, that the employees did not work any overtime, let alone the amount of overtime hours they claimed to have worked, and all felt like the employees’ lawsuits were akin to legal blackmail. But at the end of the day, these lawsuits cost my clients money to defend and either prove they didn’t do anything wrong or settle because, unbeknownst to my clients, they may not have been properly complying with the overtime laws. When my clients had no records and had not consulted with me or any employment law attorney to ensure their pay practices were accurate, it cost significantly more money to resolve the lawsuits.
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