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Why Is It Easier to Fire an Employee Instead of Refusing to Pay Unauthorized Overtime?

    Client Alerts
  • April 06, 2018

We frequently receive questions from employers faced with employees who have worked unauthorized overtime and who demand payment for hours the employer says it neither requested nor needed. The employer asks whether the company can refuse to pay the additional time. The answer may be more complicated than it would appear. In some situations, the Fair Labor Standards Act requires payment of hours worked by an employee without the employer’s specific authorization.

Under the FLSA, truly unauthorized hours are not compensable. However, employees often contend that despite the lack of specific permission to work that time, their supervisor was at least aware that the employee was putting in the additional hours. The employee’s physical presence in the workplace after hours, or emails and other communications with the supervisor during this time, can be offered as evidence of the manager’s knowledge that the employee was working.

In addition to specifically authorized work, the FLSA requires payment if the employer “suffered” the employee to work during additional hours. This means that if the employer knew or should have known that the employee was working, it cannot refuse to pay on the basis that the time was not authorized. In order to avoid payment, the employer would need to demonstrate that it directly told the employee not to work the additional time, and that he or she ignored these instructions.

This level of proof is often difficult to obtain. As an alternative, the employer may choose to pay the disputed hours but to accompany the payment with a formal warning or other disciplinary action based on the employee’s ignorance of a written policy regarding the need to obtain authorization before working overtime. While the warning cannot be motivated by retaliation against an employee who complains about not being paid, employers have the right to consistently enforce their overtime policies. In extreme cases, employers may choose to terminate employees who repeatedly ignore these directions, instead of deducting the hours and risking a wage payment claim.