Managing Unauthorized Overtime in a Pandemic

With no end in sight to telecommuting for many employees – and lines between home and work therefore continuing to be blurred – employers are faced with a number of legal and employee relations issues. Among those are making sure that employees are paid properly. Even before the pandemic, managers often asked whether employers must pay nonexempt employees for overtime worked without permission, especially when employees have been told that unauthorized overtime is prohibited. For a telecommuting employee, for example, what should the employer do about the employee who stays logged in past normal business hours, continuing to respond to email or the employee who “works off the clock” to get caught up? The short answer to the question of whether this time should be paid almost always is “yes.”

According to the regulations interpreting the Fair Labor Standards Act (the federal wage and hour law), “Work not requested but suffered or permitted is work time.” The employer “cannot sit back and accept the benefits without compensating for them.” Even a clearly communicated policy prohibiting unauthorized overtime does not relieve an employer from its legal obligation to pay nonexempt employees for all hours worked. Therefore, if the employer in any way allows the employee to perform the work, the employer is liable for compensating the employee.

All is not lost, however, and employers can take the following steps to manage and prevent unauthorized overtime by nonexempt employees:

• Actively discourage employees from working extra hours by designing, implementing and enforcing a clearly communicated policy regarding the recording of time. The policy should explain how non-exempt employees are to report their hours worked and make clear that non-exempt employees: (1) must record all hours worked; (2) should not work outside their scheduled work hours without prior authorization from management; and (3) must report hours worked, even those worked without prior authorization.
• Don’t just stick the requirement in a policy handbook, however. Provide managers and supervisors with training to prepare them to monitor and enforce the policy in a consistent manner. Regularly remind employees and managers of the policy and that nonexempt employees should obtain supervisor approval in advance to work overtime.
• If necessary, counsel and discipline employees for violating the policy. But, do not refuse to pay the employee for unauthorized work.

Managers and supervisors are an employer’s best line of legal defense in this area. It is absolutely vital for employers to train supervisors on wage and hour law and the organization’s related policies and practices. Make sure they understand that employees must be compensated for all hours worked. If overtime is not going to be authorized, make sure that managers and supervisors set realistic expectations and do not pressure employees to “just get it done” by working off the clock. In addition, management should regularly check employees’ time records to ensure that all employees are properly reporting their time.

When in doubt about the appropriate course of action, employers should consult with experienced human resources professionals and/or labor and employment counsel. For MEA members, the Hotline and a Member Legal Services attorney are available to provide this assistance.

Amy G. McAndrew, Esquire
Director of Legal and Compliance Services
MidAtlantic Employers’ Association
800-662-6238

*This Alert is provided for general informational purposes only and does not constitute legal advice.