Are Employers Obligated To Pay Unauthorized Overtime?

Employees who are eligible for overtime -- those who are not exempt under the federal Fair Labor Standards Act (FLSA) or their state's law -- are entitled to pay for every overtime hour their employer "suffers or permits" them to work.

This standard can be tough to interpret, but usually compels employers to pay for extra hours.

How Overtime Works

Federal and state overtime laws require employers to pay eligible employees a 50% premium -- generally referred to as time and a half -- for overtime hours. In federal law and in most states, an employee is entitled to overtime after working 40 hours in a week. A handful of states have a daily overtime standard, which entitles employees to overtime if they work more than eight hours in a day.

An employee who works overtime gets paid his or her usual hourly rate for the non-overtime hours, plus one and a half times that rate for the overtime hours. For example, an employee who earns $20 an hour would be entitled to $30 an hour for overtime.

Hours the Employer Suffers or Permits

Under the FLSA and state laws, an employer must pay for any overtime hours it suffers or permits the employee to work. Of course, this includes overtime the employee is required or requested to work. For example, if your supervisor asks you to work an extra shift, or you are regularly scheduled to work 45 hours a week, you are entitled to overtime for those extra hours.

What Is Unauthorized Overtime?

But what about overtime that is neither required nor requested by your employer? In this situation, any overtime the employer knows or should know about must be paid.

Here are some examples:

• An employer requires employees to "clock out" before cleaning up the store at night, so their cleaning time isn't recorded. The employer must pay for this time.
• A manager assigns work to an employee late in the day, asking the employee to have it finished by the following morning.
• A manager regularly receives work-related email and phone messages from employees in the evening and on weekends.
• An employee tells a manager that he or she is working after hours.

Some employers try to avoid having to pay overtime for work they didn't request or know about by adopting a policy prohibiting overtime work unless the employee gets permission.

Typically, these policies state that unauthorized overtime will not be paid. However, depending on the circumstances, an employer may have to pay for unauthorized work even if the employee didn't get permission first, if the employer "suffered or permitted" the work.

Penalties for Unauthorized Overtime

It's legal for an employer to discipline employees for working unauthorized overtime. If the company really wants to show that it doesn't intend to suffer or permit this type of work, and that it really does not want employees to work overtime, it will impose discipline for violations of its overtime policy.

Depending on the circumstances, the employer may still have to pay the employee for the overtime work, at least the first time discipline is imposed.

However, if the employee continues to work overtime after being disciplined for doing so, the employer has a stronger argument that it neither suffered nor permitted this work, and shouldn't have to pay for it.

What If Employees Don't Comply With an Unauthorized Overtime Policy?

Employers have a number of options for dealing with employees who don't comply with their unauthorized overtime policy. They include:

• verbal or written warnings
• reducing hours
• demotion
• suspension, or
• termination.

Employers should be sure to clearly communicate their policy to all employees and enforce it consistently to avoid legal trouble.

Getting Legal Help

If you are required to work off the clock or are otherwise being denied overtime you have earned, you should talk to an employment lawyer.

An experienced attorney can assess your situation and figure out whether your employer is complying with the law. If not, the attorney can help you assess your options and figure out the best strategy to protect your rights, including perhaps filing a complaint with the federal or state labor department or even filing a lawsuit.