Am I liable if the seller misclassified employees to avoid overtime obligations?

It depends on your deal structure. In a share purchase, generally yes — a misclassification that led to unpaid overtime is, in substance, an unpaid wage liability of the corporation, and since the same corporation continues under your ownership, that exposure continues too, regardless of whether it's ever been formally identified or claimed yet.

In an asset purchase, the historical liability for overtime unpaid before closing generally stays with the selling corporation as the employer at the time, provided your purchase agreement is clear on this point. Where you do need to be careful is going forward: if you continue engaging the same individuals under the same "contractor" or exempt classification the seller used, and that classification was genuinely wrong, you can begin generating your own fresh overtime liability the moment you continue the same practice under your own ownership, entirely separate from whatever happened before closing.

Review job classifications and actual working arrangements carefully during due diligence, correct any that don't hold up, and don't simply continue an existing practice without checking whether it was ever properly classified in the first place. A Treadstone business lawyer can help you review this before closing.