Working off the clock in California can trigger back pay, overtime, and penalties when employees work unpaid hours you knew about. Get examples, warning signs, and practical steps to prevent payroll issues, burnout, and costly wage claims.
By Brad Nakase, Attorney
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In California, working “off the clock” is a big no-no. Basically, if an employee is doing work and you know about it, they have to be paid. No exceptions.
If they aren’t getting paid, they can sue for their back wages—and potentially for “pain and suffering” on top of that. For a small business, those legal fees and payouts add up fast. It’s a total headache you don’t want.
That’s why you’ve got to be proactive. You need to understand why your team might be working unpaid hours & set up a system to stop it before it starts.
Important Learnings
California law is pretty strict about this. The clock needs to be running if your crew is working. It makes no difference if they claim to be “volunteering.”
In plain terms, “working off the clock” is when an employee is doing job-related tasks but isn’t getting paid for that time. California law doesn’t care whether it’s five minutes or fifty — if the work is required or expected, it counts.
This kind of unpaid work happens more often than people realize. Common examples include:
Sometimes this unpaid time would’ve just been paid at the regular hourly rate. A lot of the time, though, it pushes the workday over legal limits — meaning the employee should’ve been paid overtime at time-and-a-half, or even double time, under California law.
1. Employee morale and working off the clock
Morale usually slips first. When people are working extra hours and not getting paid for it, they feel it almost immediately. Being tired is one thing. Being tired and unpaid is another. That’s when resentment creeps in. Motivation drops.
A lot of employees still show up, do the work, & finish the tasks. It starts to feel pointless when those efforts—especially the important ones—go unnoticed. They don’t feel valued. They feel used. And once someone reaches that point, performance almost always slides. Not out of laziness but out of burnout.
The lack of pay only makes it worse. If someone keeps giving time and gets nothing back, they eventually pull away. Maybe they will stop volunteering. Maybe they rush the task. Maybe they just do the bare minimum. It’s a quiet shift, but it happens.
That’s why small business owners need to pay attention here. Recognition matters. Acknowledging effort matters. People need to know their work counts. Violating ‘working off-the-clock laws’ can hurt morale.
Off-the-clock work can’t be ignored or brushed off. Clear rules still matter. There has to be a response if someone keeps breaking it. Employers can support morale and enforce boundaries at the same time. One doesn’t cancel out the other.
2. The Payroll Nightmare
Working off the clock also creates a massive mess for your books. If people aren’t recording their actual hours, your payroll records are basically a lie.
Think about it this way: if an employee quietly works just two extra hours a week for three months, that’s about 25 hours of missing pay. When that finally comes to light—and it usually does—you’ll be hit with a surprise bill for all those back wages at once. It’s way easier to pay for the work as it happens than to get slammed with a huge, unexpected labor cost later on. Not tracking hours accurately can put your business at risk under ‘working off-the-clock laws’.
In California, it’s often way more subtle than that.
A lot of business owners know just enough about the law. They try to skirt around it without making it obvious.
The only way an employer isn’t responsible is if they honestly had no clue the work was happening. But if they see you working late, or if it’s obvious that the work couldn’t have been done during normal hours, they’re responsible. If they know about it—or even if they just should have known—they have to pay you.
Yes. Non-exempt salaried employees may fall under working off-the-clock laws. In California, any non-exempt employee is eligible for overtime compensation if they work:
The white-collar exemption in California exempts many salaried employees, but not all of them.
Therefore, even if you are paid, you may have a case against your employer if you work more hours without getting paid more.
You should be able to demonstrate each of the following requirements if you want to win a lawsuit against the company for back wages resulting from working after hours:
If that sounds familiar, talk to a reliable lawyer soon. Don’t wait. Usually, you’ve got three years from when it happened to file a claim. The statute of limitations is limited to one year or less in some labor violation instances.
At the end of the day, working off the clock isn’t a gray area in California. It’s pretty black and white. If work is getting done, someone needs to be paid for it. Trying to look the other way, or pretending you didn’t notice, doesn’t protect a business. It usually does the opposite.
For employers, the fix isn’t complicated—but it does require paying attention. Clear rules. Real conversations. Time records that actually match reality. That’s what keeps things clean. Waiting until someone files a claim is the most expensive way to learn this lesson.
For employees, it’s about knowing your time has value. Every task counts. Every minute counts. And you’re not being difficult or disloyal by expecting to be paid for your labor.
Working for free doesn’t just mess with the numbers—it kills the vibe. When staff work for free, it’s a slow burn that kills morale and trust way before you even see the smoke. By the time you notice, people are usually already burnt out or resentful. Trust me, it’s a whole lot cheaper and way less of a headache to just catch it early and pull the plug than it is to try and fix a massive legal or cultural mess later on. Following working off-the-clock laws is about avoiding lawsuits and respecting employees.
1. Working off the clock: Is it illegal?
Short answer: yes. If you’re an hourly employee in the U.S. and you’re doing something that helps the business, that time has to be paid. There’s no such thing as doing a “quick favor” for a for-profit employer. And you don’t get to “volunteer” your time either. Work is still labor, even if it takes only a few minutes,
2. What happens to the company that lets people work off the clock?
That’s a risky game. If it comes to light, the company can be forced to cough up unpaid wages and overtime, plus penalties on top of that. And here’s the part that really scares employers: if someone gets injured while working unpaid, insurance may not cover it. That’s when things spiral fast.
3. How can a business stop this from happening?
Clarity beats everything. The rule should be simple and repeated often. You are working if you’re on the clock. Good time-tracking helps, but it only works if managers actually enforce it. Talking to employees, setting expectations early, & shutting down “just help out real quick” moments makes a big difference.
4. What does “off the clock” actually look like?
Understanding ‘working off-the-clock laws’ in California is crucial for every employer & employee. It’s not just staying late. It’s also:
5. How does this affect employees over time?
It usually drags morale down. Working without pay builds frustration and burnout. It also creates pressure on others to do the same.
6. Preventing off-the-clock work: What can help?
Consistency. Good time-tracking tools help, but so does enforcing the rules the same way for everyone. When hours are visible, problems are easier to catch early.
Have a quick question? We answered nearly 2000 FAQs.
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