Can employers refuse to pay employees for unauthorized overtime?
I was recently asked by a client if he had to pay overtime to hourly employees who had ignored the company policy that all overtime must be approved in advance. He explained that he had told two of his employees time and time again that they had to punch out each day for lunch and leave their desks and not return for one hour. However, the employees would just ignore this and remained at their desks through lunch. His question “Do we have to pay them for the unauthorized overtime?”
The answer is yes; they must be paid for all hours worked regardless of approval.
The Fair Labor Standards Act, clearly states that regardless of whether an employer authorizes overtime, “Work not requested but suffered or permitted is work time.” This includes if the employee violated an employer’s policy of obtaining approval prior to overtime being worked.
What can an employer do? While an employer must compensate an employee for overtime worked, an employer is permitted to establish a policy against unauthorized overtime. Employers can inform all workers that approval is required before overtime is worked and provide disciplinary consequences, including termination of employment, for when that policy is violated. However, a policy is not enough. Employers must actively enforce that policy to ensure that employees comply.
Employees have a legal right to be paid, including overtime payment. Not understanding the rights of employees when it comes to compensation rights can result in fines, penalties and awards of back pay for amounts deemed by state or federal authorities to be due to employees. It’s therefore important for employers to understand their responsibilities and to keep all supporting records and documentation so that they can prove, if called upon, that they have met their legal obligations.