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Teach Managers to Stop Unauthorized OT

February 12, 1999
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Related Topics: Wages and Hours, Featured Article
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Issue:
Your managers have worked hard to create an effective team environment, and it shows. Cross-functional teams of exempt and non-exempt employees are accomplishing great things throughout your organization. Enthusiasm and a strong work ethic are evident everywhere. In fact, a manager has just commented that things are going so well that one technical support person came in last Saturday for four hours to finish a project—after already putting in a full workweek! And another clerk has taken to coming in ½ hour before her shift starts to give herself more time to get her work done. He’s delighted; you’re not. Both of the employees mentioned are nonexempt. But you do have a policy in place that prohibits unauthorized overtime, and it’s been well communicated. What should you do?

Answer:
Even an employer’s prohibition against overtime work does not always protect it from overtime pay liability.
First, ask whether prior approval for the overtime was given. Even if it was not, you should direct the manager to report four extra hours of work to payroll for the tech support employee. Since you have a policy requiring prior approval for overtime, the employee may be disciplined for violating the policy. But the employee must receive time-and-one-half overtime pay for the work over 40 hours in the pay period. Moreover, caution the manager that he cannot give time off in the next week to compensate for the extra hours, since "comp time" cannot be applied outside the Fair Labor Standards Act workweek.

Whether or not an employee is "suffered or permitted" to work overtime is a question of fact to be decided on a case-by-case basis.
Although the manager has cautioned the clerk to not work until her shift actually starts, it appears his employee is actually working more than 40 hours a week and would be entitled to overtime pay for work she was "suffered or permitted" to do. It’s clear he has notice of her work schedule; has he done anything to make her stop?

Employers need to actively discourage any unauthorized overtime.
It’s not enough to repeatedly remind employees that overtime is not authorized and to establish a policy against it. Employers are liable for work that they know or have reason to believe is being performed even if overtime is prohibited. This means that employers have a duty to see to it that unauthorized work is not being done. The manager should report the extra hours to payroll and, in the future, must require the employees to go home once 40 hours are worked in a week if overtime is to be avoided.

Cite: Fair Labor Standards Act, Sec. 7(a).

Source: CCH Incorporated is a leading provider of information and software for human resources, legal, accounting, health care and small business professionals. CCH offers human resource management, payroll, employment, benefits, and worker safety products and publications in print, CD, online, and via the Internet.

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