Am I liable for unpaid overtime that built up under the previous owner?

It depends on your deal structure. In a share purchase, yes — unpaid overtime is a debt the corporation owes its employees, and since the corporation continues under your ownership, that debt continues too, regardless of when the overtime was actually worked. Employees can generally pursue what they're owed regardless of who currently owns the company, because their employer, legally, hasn't changed.

In an asset purchase, this liability generally stays with the selling corporation as the employer at the time the overtime was worked, provided your purchase agreement is clear that you aren't assuming pre-closing wage liabilities. Where it gets more complicated is for employees you continue to employ under going-concern continuity, since their overall service history carries forward for entitlement purposes even though the specific unpaid-overtime debt itself should, in a properly structured deal, remain the seller's responsibility to resolve.

Review payroll records and any wage complaints or claims as part of due diligence, and make sure the purchase agreement clearly allocates responsibility for pre-closing wage liabilities rather than leaving it ambiguous. A Treadstone business lawyer can help build appropriate protections into the deal.