Overtime is highly popular among employees who want to squeeze those few extra dollars out of the week for a job well done. It’s far less popular among employers worried about longer work weeks stretching a skimpy budget even thinner. In many industries, overtime has become a way of life. However, eager employees and employers aren’t the only ones interested in the type of work being performed “after hours.” Workers Comp insurance companies and the IRS have developed their own standards for overtime pay — and these rules could mean trouble for companies that violate them.
Here’s an example of a company that decided to ignore the regulations set by Comp insurers and the IRS. The owner of a New Hampshire trucking business decided that instead of confusing himself and everyone else about overtime pay for some of his workers, he would “reward” them by paying the difference in cash under the table. To make a long story short, the owner got slapped with a slew of federal conspiracy charges from the IRS and the Transportation Department — not to mention an angry Workers Comp insurance company.
The bottom line: Creative schemes to cut Comp costs are never an acceptable alternative. Businesses buy this coverage to protect both themselves and their worker in the event of a workplace illness or injury, regardless of whether it occurred during the regular work week or while working overtime.
Make a call to any of our insurance professionals at Scurich Insurance and learn what your first step is in designing and maintaining an affordable Workers Compensation program that can offer the protection you need without incurring legal penalties. To learn more about this and similar topics, follow us on Twitter.