Do You Have to Pay Unauthorized Overtime?

By Stephanie Rabiner, Esq. on June 6, 2012 5:02 AM

As an employer, you likely go to great lengths to budget payroll. You calculate just how much you have to spend and schedule everyone accordingly.

But everyone has that one employee who works off-the-clock even though they weren’t asked to. Or that employee who overstays their daily welcome, triggering overtime wage laws.

What can you do? Do you have to pay unauthorized overtime?

Generally speaking, yes. If you are aware that the employee worked off-the-clock or longer than she was supposed to, you are responsible for any related wages. This is true even if it’s overtime and unauthorized. If you don’t pay your employee, you may find yourself the subject of a wage complaint.

Keep in mind that the duty to pay unauthorized overtime does not limit your ability to discipline employees who put you in such a situation. There is no federal law, and likely no state law, that prohibits an employer from drafting or enforcing an overtime policy.

Such a policy should include rules about when overtime will be allowed and how it needs to be approved. It should also set forth the disciplinary measures employees will face should they fail to comply. While such measures should not include non-payment, they can include write-ups, suspension or even termination.

When implementing such an overtime policy, it’s important to let your employees know about the rules and to be clear about the repercussions. While you legally must pay unauthorized overtime, you don’t have to continue to employ someone who busts your budget.