Question
We have a problem with employees who clock in and start working before their shifts are scheduled to begin. They also continue working and clock out after their shifts are scheduled to end. As a result, these employees work over 40 hours a week and are entitled to overtime pay. We have a policy that specifically states that employees must receive prior approval before working any overtime. Can we refuse to pay these employees for the unauthorized overtime that they worked, since they violated our policy and did not receive prior approval? If not, what other recourse do we have?
Answer
In its Fair Labor Standards Act (FLSA) Hours Worked Advisor, the U.S. Department of Labor (DOL) provides that “[i]t is the duty of management to exercise control and see that work is not performed if the employer does not want it to be performed. An employer cannot sit back and accept the benefits of an employee’s work without considering the time spent to be hours worked.”
Thus, employers must timely pay all wages for hours that they know or should know employees worked. If employees clock in before their scheduled start times and start working, this time is payable, even if it results in employees’ working when they are not supposed to and incurring unauthorized overtime in violation of company policy. The same rule applies if employees continue working and clock out after their scheduled end times. As the DOL notes in the guidance referenced above, “Merely making a rule against such work is not enough. The employer has the power to enforce the rule and must make every effort to do so.”
That said, as the DOL suggests, an employer is not without recourse. Employees who clock in before the start of their shifts, clock out after their shifts end, and/or incur unauthorized overtime can be disciplined for any such policy violations. However, the disciplinary action for these types of infractions must stop short of failing or refusing to pay wages (including overtime) that are otherwise due.
In sum, while employees can be disciplined for violating company policies relative to adhering to a specific schedule, any proposal to dock pay as a form of disciplinary action can lead to unpaid wage claims and penalties. Remember to check your state and local laws for any additional rules that may apply.