Miscalculated overtime pay leads to $4​ million in restitution

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A Texas health care system's incorrect method of overtime distribution means a lot of money is owed to a large group of employees.

More than 4,500 non-exempt workers, ranging from medical professionals and pharmacy technicians to security personnel and auditors, didn't have incentive pay included in calculations of overtime compensation, according to news source Business Management Daily. The affected staff, who work at three hospitals and more than 20 clinics and other medical offices, will receive more than $4 million in back pay.

The restitution came after an investigation by the U.S. Department of Labor's Wage and Hour Division found that the health care system, which issued various incentive-based pay increases, didn't factor those increases into the calculations for overtime. The Fair Labor Standards Act does make some exceptions to what is included when determining overtime pay, like discretionary bonuses, but incentive-based pay is not among them.

Businesses can keep accurate time and attendance records by using employee management software to help correctly figure out overtime pay, vacation time and other attendance concerns. A regular review of employee pay is also a good plan for businesses, making sure irregularities are caught and corrected before they cause more serious problems.

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