Answers to tricky HR questions: Have to pay for unapproved OT?
July 17, 2009 by Jim GiulianoPosted in: Answers to tricky HR questions, FLSA, In this week's e-newsletter, Latest News & Views, Pay and benefits
Our team of experts fields real-life everyday questions from HR managers and gives practical answers that can be applied by any HR pro in the same situation. Today’s question: Do we have to pay overtime to people who don’t get it officially approved?
Question
We have told our employees that overtime must be pre-approved. However, we still have some people who get in early or stay a little late each day, amounting to an hour or two of overtime per week.
Can we avoid paying overtime in those situations if employees didn’t get it pre-approved?
Answer
If employees work overtime, they must be paid for overtime, even if the overtime is unapproved and against company policy, according to Jane Dalton, an employment lawyer at Duane Morris LLP.
She suggests that you:
1. Reannounce your policy. Warn employees they will be disciplined up to and including discharge for violating the policy that overtime is not to be worked unless it is approved in advance. Then have supervisors follow through with discipline for infractions.
2. Instruct supervisors to keep track of time worked. If someone comes in early or leaves late and is working during that time, the supervisor can reduce the hours later in the same week. Otherwise overtime must be paid.
Tags: duane morris, overtime
July 17th, 2009 at 1:51 pm
As the Director, I handle unapproved OT in this manner. All time worked by an employee is paid, but I put ownership of the overtime on the supervisor. They are not tracking the work done by the employees, so it rests with them. I have formally disciplined or have had managers formally disipline the supervisor. For repeat violations, I have formally disciplined managers. I have terminated supervisors for failure to enforce the policy.
July 20th, 2009 at 9:00 am
When I worked in retail management, the concept was similar in that I tracked our payroll hours each day and during mid-week to see where we were at and made cuts accordingly if people were over. It was a repetitive task in talking to the same people each week, but then they started getting written up for coming in early because they “knew” they’d get to leave early then during the week or on Friday to cut hours. So, I didn’t just discipline the supervisor, but the employees too who were repeat offenders of the “clocking in early” scenario.
July 20th, 2009 at 10:38 am
We had a written policy that working unapproved overtime would result in disciplinary action, but the big boss was very young in experience and would not let the supervisors follow up on the disciplinary action, he’d just “talk to the employee about it.” This didn’t work at all; people continued to work unapproved overtime, come in early or stay late without regard for company need, and as he continued his “conversation without consequence” practice, people just felt nagged bug weren’t inspired to change their behavior. He wouldn’t change the policy to reflect what he was actually willing to do, just in case he changed his mind at some point.
Finally the supervisors got together and reduced the scheduled work days of people who continued to work unapproved overtime. In CA, you get paid OT for any work over 8 hours in a day, you can’t just round out the week. By taking away a full scheduled workday for repeat offenders, they lost the financial incentive and also were hit with peer pressure by the team members who had to pick up the lost shifts. And since paid time off was calculated by actual hours worked for hourly staff, they also lost the opportunity to earn those increments of PTO when their hours were reduced. If they got their act together and stopped working unapproved overtime, their work hours were restored the following month.
July 20th, 2009 at 10:40 pm
The problem we have is that our employees are not working during the unapproved overtime.
They either arrive early, clock in, and then go to the employees lounge to drink coffee until it’s time for work. Another tactic they use is when the work day is over, the go to the lounge and hang around for half an hour before clocking out.
Cutting their hours is not an option in our case. We are a school and must abide by the DOE’s student to adult ratio. Cutting their hours would result in a violation of the DOE policy.
A rock and a hard place?
July 21st, 2009 at 9:44 am
The most important thing is having a policy that communicates the expectations and the consequences of failing to abide by the policy. If employees are not following the policy, then you must consistenty document the offense, the expectations and that failure to comply will result in…
Despite violating the policy, always pay the overtime. There is no law that says that you can’t terminate employees who violate a known policy.
July 23rd, 2009 at 2:03 pm
This is the OPPOSITE side of the overtime issue. My husband is often told to work overtime without over time pay. It’s been straight time for the past six years, no matter what the number of hours. Even during the building boom in 04-05 when huge profits were made by his company. And if you say no, YOU LOSE YOUR JOB, which would be a disaster in any economy.
Last Tuesday (July 21) he worked 7am to 11pm with a couple breaks for food. NO OVERTIME for nearly 16 hours of work! Other times it was 50 or 60 hours a week. But what really makes me mad is the company owner’s wife is a member of SHRM here in Florida, and KNOWS their employees receive no overtime pay! And on top of that, they don’t even have up-to-date insurance! How do these people get away with this and how do still sleep at night???
July 23rd, 2009 at 2:22 pm
Essie -
Is your spouse an exempt employee? Is there some kind of union agreement that addresses over-time? Finally, has he contacted wage and hour? If he does this and loses his job he has another claim for retaliation.
July 23rd, 2009 at 4:13 pm
Kelley – Thanks for your response. No, he is not exempt. He works for a small construction company, has no contract and is not a union member. And he won’t contact Wage & Hour. He says if I do, he’ll be fired. His boss also takes NO federal taxes out of the employee’s paychecks, so they are all responsible for keeping track and paying up at the end of the year. I’m sure there are many small companies who illegally operate under the radar.