Am I Required to Pay an Employee that Worked Unauthorized Overtime?

Yes.  If you did not give an employee permission to work overtime but he or she does so anyway, under the Fair Labor Standards Act, you still must pay the employee overtime wages. Any overtime worked by non-exempt employees must be compensated, regardless of whether the overtime was authorized.

We recommend communicating with the employee about work expectations outside of their scheduled workday, making it clear that the company does not expect or permit employees to work unauthorized time and that working without permission is subject to disciplinary action.

Assuming you have a policy that requires overtime that was authorized ahead of time, you can (and should) discipline employees for working unauthorized overtime, just as you would for any other violation of your policy. An oral or written warning may suffice for the first offense. Repeated offenses may warrant further corrective action, up to and including termination.

Are you taking steps to keep employees from putting in extra hours that you haven’t approved?

• Create an overtime authorization policy, put it in the company handbook and enforce it.
• Remind employees about the policy in periodic emails.
• Post notices about the policy in the company breakroom and by time clocks, for example.
• Discipline employees who violate your clearly stated rules. Although you have to pay unauthorized overtime, the FLSA does allow employers to discipline those who ignore company policy.

Depending on the nature, structure and location of your business, you may need to consider other overtime rules, such as:

• Weighted average overtime for employees who work multiple jobs at different rates.
• Overtime premiums for employees who work outside normal business hours, such as on Sundays or holidays.
• Fluctuating workweek method, which allows employers to calculate overtime pay at 0.5 (instead of 1.5) times the regular rate of pay.

Looking for help with creating and managing overtime policies? Work with a certified HR Professional today.