One question I get asked with some regularity is whether an employer must pay an employee for time spent working without permission, even if the employee has been told not to do so. It may be an employee who works through a lunch period which is supposed to be unpaid or an employee who begins work too early or leaves too late. It may also include employees who take work home and “work off the clock” to get caught up. The short answer to the question of whether this time should be paid, whether fair or unfair, is almost always, “yes.”
The follow up question I’m asked after employers have accepted that they must pay employees for unapproved time worked is, what can they do about it. The basic answer is the employer should implement and enforce a time and attendance policy that contains a provision addressing unapproved work time. Although implementation of a time and attendance policy does not absolve an employer of its obligation to pay employees for unapproved hours worked, it can be used to discourage employees from working when not authorized while giving employers a basis for disciplining employees when they do.
- Are employer required to pay workers who work off the clock?
- Time and attendance policies
- Different policies for different classifications of employees
- Enforcing time and attendance policies is necessary
Are employer required to pay workers who work off the clock?
There are two situations when an employee works when they are supposed to be off the clock. The first situation is when the employee works off the clock and the employer knows or has reason to believe the employee is continuing to work. The second situation is when the employee works and the employer is unaware the employee is still working.
Hours worked off the clock of which the employer was aware
Under federal and state wage and hour laws, employers are required to pay employees for all hours worked of which the employers were aware or had reason to know the employees were working. It does not matter whether the employee worked during their scheduled time or not. The federal Fair Labor Standards Act (FLSA) regulations specifically state that:
Work not requested but suffered or permitted is work time. . . The reason is immaterial. The employer knows or has reason to believe that he is continuing to work and the time is working time.
29 CFR 785.11. Additionally, the federal regulations clarify that:
The rule is also applicable to work performed away from the premises or the job site, or even at home. If the employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.
Thus, if an employer knows or has reason to believe an employee is working, even if the time is unauthorized, the employer must pay the employee for the time worked.
Hours worked off the clock of which the employer was not aware
Technically, an employer is not required to pay an employee for off the clock working time if the employer was unaware the employee was working the time. However, whether an employer knows or should have known an employee was working off the clock is very fact specific. Many employers have lost cases and have had to pay back pay simply because they did not sufficiently ensure their employees were not working off the clock.
Once an employer admits an employee has worked off the clock, they will effectively have the burden to prove that they could not possibly have known the employee was working. Usually, this is a costly and time consuming burden that is rarely worth trying to overcome.
Unauthorized hours worked and overtime pay
Under the FLSA and state wage and hour laws, employers are required to pay employees overtime pay for all hours worked by an employee in a workweek or, in a few states, workday. Neither the FLSA or state labor laws provide an exception to including off the clock time worked in determining if an employee is entitled to overtime. Thus, an employer must include all on-the-clock and off-the-clock time worked by an employee of which the employer knew or should have known in their overtime calculation and overtime pay.
Time and attendance policies
The best defense to employees working off the clock is a clearly written time and attendance policy. Good time and attendance policies do three things:
- First, they set forth the employer’s expectations regarding the hours employees are expected to work and the hours they are expected not to work. Thus, good time and attendance policies will contain provisions addressing tardiness and absences, as well as provisions informing employees that they may only work time that has been approved by the appropriate supervisor or manager.
- Second, they provide employees a method to notify the employer in writing when they have worked outside their scheduled time. This helps employers track all time worked and reduces wage claims. It can also provide a defense against employees who claim they have worked off the clock but did not take advantage of the employer’s off-the-clock work notification system.
- Third, they set forth the discipline system the employer will apply to employees who violate the time and attendance policy. The discipline system should be consistent with any other discipline policies the employer maintains to avoid confusion and contradiction.
Different policies for different classifications of employees
Employers who have diverse workforces may need to implement different time and attendance policies for different classifications of employees, which is not only appropriate, but recommended if schedules and work expectations differ significantly between employee groups.
For example, I have a friend who runs a pest control business. As part of his business, he has an administrative staff that works exclusively in the office and generally work 8:00 a.m. to 5:00 p.m., Monday through Friday. In addition to the administrative staff, he has a group of technicians who apply pest control treatments at customer’s homes and businesses. These technician spend almost all of their work time away from the office, frequently work overtime, and have hours that vary each day depending on the number of service calls they have scheduled.
Because of the significant differences in the schedules, work hours, and work locations for the two employee groups, my friend maintains separate time and attendance policies for each.
Enforcing time and attendance policies is necessary
I would like to reinforce one point about time and attendance policies and unauthorized work time. Even if an employer has a time and attendance policy that prohibits an employee from working unapproved time, the employer is still obligated to pay the employee for the unauthorized hours worked. As stated by federal regulation:
In all such cases it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.
Thus, an employer’s best recourse when an employee has clearly worked unauthorized hours is not to refuse to pay them, but instead discipline the employee consistent with the established time and attendance policy.
Federal and state wage and hour laws typically require employers to pay employees for unapproved hours worked. To address issues related to employees working unapproved time, employers are encourage to implement and enforce time and attendance policies that 1) specifically state employees may only work hours that are previously approved, 2) include a policy where employees can notify employees in writing they have worked off the clock, and 3) explicitly state the discipline that will result if unapproved time is worked.
By implementing and enforcing such a policy, employers can ensure workers are aware of the work hour expectations and the potential consequences if they fail to meet those expectations.