Lawsuits for unpaid overtime continue to be one of the more prevalent types of employment claims brought against all types of employers.
One proactive and preventative strategy to avoid such lawsuits is to have a company policy prohibiting employees from working more than forty hours a week without prior approval.
Such a policy is a good step towards managing the risk of lawsuits for unpaid overtime. However, employees who sue for overtime often claim that the employer circumvented or did not follow its own policy because supervisors:
- withheld overtime approval;
- required employees to either clock out but continue working or not clock in during working time i.e. during “on-call” time;
- falsified their employees’ time records to avoid reporting of overtime.
If an employee makes these types of claims, the employer must then be able to present credible evidence (i.e. documentation) that the employee is wrong. If a group of employees presents a consistent story, i.e. that supervisors would not let them report overtime, then it will be difficult for the employer to win on this fact question. Even if the employer has good policies, if the supervisors are not enforcing them, the employer may be liable for unpaid overtime and the other damages and attorneys’ fees that are available in unpaid overtime cases.
Employers with “overtime approval required” policies should remember these tips:
- Train your supervisors on the company policies regarding overtime and remind them that employees must be paid for all overtime worked, even if it was not authorized. If it was worked, it needs to be paid.
- It deserves repeating — non-exempt employees who violate the policy and work more than 40 hours without approval must still be paid for all hours worked.
- Employees who violate the policy can and should be consistently and equally disciplined.
- The discipline for failing to obtain prior approval should usually be progressive discipline (everything from “don’t do it again” for the first offense to “you’re fired!” after appropriate warnings and reprimands have been given to no avail).
Notice: We are providing this client alert as a commentary on current legal issues, and it should not be considered legal advice, which depends on the facts of each situation. Receipt of this client alert does not establish an attorney-client relationship. The listed attorneys and / or other attorneys may provide services in connection with a particular matter.