Employers must pay unauthorized overtime when workers perform extra hours, including off-the-clock time known to the company. California law allows discipline for policy violations, but employers cannot withhold earned wages.
By Brad Nakase, Attorney
Email | Call (888) 600-8654
Have a quick question? I answered nearly 1500 FAQs.
Many companies find it difficult to deal with overtime without any approvals. It unnecessarily raises labor costs if left unchecked. Employers may try to control these out-of-control expenses. They may choose not to pay overtime unless management has given the go-ahead. They might draft and put into effect a policy that says that unapproved overtime would not be compensated.
It’s not that easy. There is no distinction between approved & unapproved hours under the Federal Wage and Hour law, which mandates payment for all working hours. In the end, management is in charge of making sure that workers don’t conduct any “unauthorized” labor; the Department of Labor simply monitors that the hours have been worked.
It is overtime that isn’t approved by management in advance.
It might be gradual or overt. Consider asking members of the team to put in more time to fulfill an inventory deadline. The more common phenomenon is incremental overtime. It occurs when someone clocks out ten to fifteen minutes after their shift or arrives just a few minutes early. Another name for this is time theft.
Unintentional overtime is rather prevalent, especially when there are no restrictions in place to stop it.
Even the very best of us experience it. Consider any situation where you were engaged in personal or business projects and lost track of time. Even though this is a frequent and harmless practice, it can nonetheless have a detrimental impact on your company if it is carried out in large quantities by your employees.
Here are a few more typical instances of unapproved overtime:
Overtime is only applicable in all of these situations if your employee keeps hourly time records. The aforementioned instances would not be regarded as overtime in many salaried employment because they are frequently part of regular work.
Unapproved overtime may cost you thousands or even tens of thousands of dollars annually. It will depend on your circumstances. You have to be very good at managing your team’s schedules. By preventing unintentional overtime, money that would have been spent on overtime is returned to your bank account.
There are fewer resources available to you as the company when employees work extra hours without informing you. You have serious issues if they are overworked or exhausted, and anything goes wrong, or if someone’s safety is at risk. If it’s unclear if that worker is officially on the clock, you can get into some muddy water in addition to a safety infraction.
It is against California labor law for your boss to have you work after hours if you are paid. You have to get paid for all the time you spend working. This is true even if your boss did not approve the additional time; if they were aware of it or ought to have been aware of it, you must be compensated.
In California, employers occasionally require their employees to arrive early without clocking in or to continue late without clocking out. Some bosses adopt more covert tactics, such as giving workers additional duties that they could complete in a typical workday. Neither is lawful.
Misclassifying employees as independent contractors is another strategy used by businesses to get around California’s off-the-clock regulation. “I’m going to make you an independent contractor and give you a daily rate since I don’t want to pay you in excess of $120 per day, regardless of whether you work beyond 8 hours,” an employer may explain. This is often illegal. Misclassifying workers in order to avoid paying them an assured minimum wage for every hour worked is prohibited under California’s independent contractor law.
In California, employers may attempt to claim that they are exempt from paying their workers for overtime because they were not authorized to do so. These employers contend that their workers will be responsible for paying for whatever additional hours they choose to put in.
However, California law does not support that. According to the California Supreme Court, if a company “stood quietly by” an employee’s off-the-clock work and knew or should have known about it, the company must reimburse the worker for those hours.
Related Read: How to Calculate Daily and Weekly Overtime in California
1. Put in place a digital time clock
You must first identify the overtime gaps on all of your teams. A time clock solution will assist you in doing so.
A time clock keeps track of when and how much your staff works, including overtime, whether they are using a device or not. It’s simple to check your timesheets at the conclusion of each week to identify instances of unauthorized overtime because everything is precisely connected to your schedule & payroll.
2. Clearly define and convey overtime limitations
You ought to communicate with your team. The objective is to reduce the possibility of employees taking unauthorized overtime. You can set a cap on the number of overtime hours you permit. Just a sticky note on the team announcement board won’t cut it.
Discussing your overtime restrictions in regular meetings is a better strategy. Additionally, put them somewhere that individuals will see them on a daily basis, such as your time tracking system or worker portal. A digital welcome packet for staff members should also contain all of the company’s policies. Make sure your new hires have read it by getting them to sign it back. Including a comprehensive policy on unintentional overtime, overtime compensation, sick days, & absences in a welcome packet is a terrific idea.
Talking about these boundaries on a regular basis makes employees reconsider working overtime for regulatory reasons. It also fosters a culture where employees feel less pressure to work above their planned hours.
3. Provide your employees with cross-training
You’re wrapping up your workday and welcoming the following shift. An unexpected issue arises that only you’re able to resolve. Do you allow the new, unprepared shift to handle the issue and possibly put them in danger?
You can assist your teams in adjusting more readily by teaching your employees to be more adaptable. They ought to be capable of solving a greater variety of issues.
These kinds of situations can also be avoided by allowing for last-minute schedule adjustments. For instance, you may quickly locate coverage for open shifts using scheduling software. Your team may pick up or switch shifts with ease. You won’t need to send out a lot of messages and emails, but you will receive alerts to control overtime.
Going back to our example, the employee or shift supervisor could search for a replacement and set up a takeover. In this manner, the present employee is not left vulnerable and compelled to continue working without authorization.
4. Align workforce levels with demand
Are you wondering what the main cause of unauthorized overtime is? We’ll let you know. It takes place when you are understaffed or add more work than your workers can handle. Review your timesheets & see if you fit this description.
Do you see any patterns with overtime schedules when you’re looking at your employees’ time sheets?
Your employees’ jobs are rarely consistent. It varies according to the time of year, shift, function, & a host of other variables. Consequently, the majority of the work is left to certain employees. To complete everything, they must use overtime. This has probably happened even more frequently if your company is understaffed.
Try to distribute the work more fairly. It can be done once you’ve identified the areas where unequal workloads are occurring. Larger shift teams, lengthier deadlines, or optimized outdated components of your process could all be examples of this.
The outcome? There are precisely the right number and kinds of team members working at the proper times.
5. Develop an equitable, user-friendly system for allocating overtime
Invest in a method to fairly allocate overtime that isn’t word-of-mouth if your staff members are consistently recording overtime.
Unauthorized overtime is occasionally taken by employees because they believe supervisors favor some employees over others. Going via formal channels is an inefficient use of time for team members who desire overtime hours because the overtime will ultimately go to someone else.
This can be resolved by putting in place a mechanism that equitably allocates overtime chances. Your system might be as easy as:
The employees with the highest experience levels should be at the front of the list.
Additionally, this technique discourages “overtime hogs.” The majority of the accessible overtime hours are taken by this little portion of the workforce. They are more inclined to employ overtime for dishonest purposes, such as time theft. Perhaps most significantly, they can create a hostile or poisonous work environment by making other employees feel hopeless about receiving allowed overtime.
Giving everybody an equal chance gives your teams hope again and reduces the likelihood that they will take the illegal option.
6. Train your supervisors
It is imperative that your supervisors receive training on both your company’s policies & wage and hour laws. Employees should be compensated for every hour they work. Reasonable expectations have to be set where overtime is not permitted. Employees must not be pressured to ‘just get things done’. Managers should regularly check staff work time records. It is to ensure they are being accurately recorded.
Some organizations use labor costs and overtime as a gauge of supervisor effectiveness. This measurement is done in a manner that discourages supervisors from taking shortcuts and allowing “off the clock” work. Time sheets should also be reviewed for signs of abuse, such as extremely low time entries or frequent manual corrections by the supervisor.
Making it mandatory for workers to request permission before taking overtime and disciplining or counseling workers who refuse to comply with the policy is 100% legal. However, refusing to pay for “unauthorized” overtime could end up costing you much more in the course of time than it will save you.
7. Discipline
Employers should have just disciplinary procedures in place to alert staff members—especially repeat offenders—when they violate overtime regulations. These mitigating measures typically take the shape of a verbal warning, a written caution, and finally a suspension—but only, of course, in the event that there is a documented guideline. In any circumstance, withholding compensation is not an option. Dismissal is the most drastic course of action when appropriate paperwork is in place.
Have a quick question? We answered nearly 2000 FAQs.
See all blogs: Business | Corporate | Employment Law
Most recent blogs:
Contact our attorney.