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Should you be worried about off-the-clock work? How should you handle employees working off the clock without authorization? Do you still have to pay them for overtime, even though you didn’t ask them to work outside regular hours?
If you’ve been frantically scouring the internet for answers to these types of questions, you’ve come to the right place.
Believe it or not, working off the clock is a huge deal. In the U.S., workers can file a complaint with the Department of Labor's Wage and Hour division for unpaid overtime for up to three years of employment and liquidated damages equal to what a former employee owes. That's an expensive blunder.
In this guide, we’ll define off-the-clock work, go over the laws and regulations surrounding it, and explore different strategies and tools you can use to prevent off-the-clock work and avoid wage and hour lawsuits.
By the time you finish reading this article, you should have a good grasp of handling overtime at your company.
Off-the-clock work is any work done by an employee that's not compensated or counted towards the worker's weekly hours for overtime.
It includes any activity that benefits the employer, even if it wasn’t strictly requested by the employer (e.g., an employee staying at work after their shift to help a colleague).
Starting work before a shift officially starts and continuing to work after the shift ends without receiving any overtime compensation both constitute off-the-clock work.
The most common reasons why off-the-clock work happens include:
Employees wanting to catch up on work. Sometimes, employees will stay after work hours to complete a task without requesting overtime first.
Preparing for a shift. Certain jobs require specific preparation before an employee can start their shift. However, pre-shift work, like preparing for a shift outside work hours, counts as working off the clock.
Being pressured by management. If an employee is assigned a task they need to complete by the end of the day but is unable to do so, they might feel pressured to keep working on the task after work hours.
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Off-the-clock work includes any pre-shift or post-shift work, whether specifically assigned or not. But what exactly does that entail? Well, it depends on the industry:
In manual labor: This could be as simple as warming up a truck, transferring equipment to job sites, cleaning up equipment and tools, or putting on protective gear. It also includes instances where the employee decides to arrive early to start the day or continues to complete job duties from the employer's premises after they’ve clocked out.
In Sales and Consulting: Off-the-clock work that must be paid includes staying late with a customer, client dinners, or other billable hours sales and consulting professionals take on outside of their normal hourly or salaried work.
In other professional services sectors: Answering work-related phone calls or emails and doing administrative work such as completing paperwork or reviewing work documents at home outside of scheduled working hours must all be paid.
People exempt from these protections are usually in management positions or salaried employees like:
C-Suite executives
Salaried managerial roles
Administrative personnel
Faculty in the education space
Outside Sales
Agricultural workers
Note: Exempt employees must make more than $684 per week. They are also exempt from overtime and are often paid a salary.
By now, you should have a clear understanding of why it's important to take off-clock work seriously to avoid ramifications from the Department of Labor's Wage and Hour division and other compliance issues that may arise.
But how do you stay abreast of what’s legal to avoid any potential legal trouble? As with most labor-related laws, the answer lies in a better understanding of the Fair Labor Standards Act (FLSA).
Federal law requires that all work performed by non-exempt employees must be paid for, including overtime pay.
This falls under the Fair Labor Standards Act's minimum wage and overtime standards.
An employer opens up to litigation if their timekeeping procedures do not accurately reflect when their hourly employees begin or end a shift.
"Your employer must pay you for all reported and unreported hours of telework that they know or have reason to believe had been performed," says the Department of Labor website.
"This is true even for the hours of telework that your employer did not authorize. It's an employer’s obligation to exercise control to prevent unwanted work from being performed."
This is because an employer can’t make any effort — let alone every effort — to prevent unwanted work (where employees keep working off the clock) unless "the employer knows or has reason to believe the work is being performed."
Still, it's up to the employer to create policies and procedures for employees to report all off-the-clock work and pay employees back wages, whether in-office or remote. They must also investigate any potential unreported off-the-clock work to ensure they pay employees for all work.
Here are a few questions to ask to determine if you're violating federal labor laws:
Are employees taking work home and not being compensated?
Are employees given sufficient time to wear a uniform or protective equipment during their shift?
Are employees paid overtime for staying late to finish helping a customer?
Do employees arrive before their shift starts and stay after it ends for prep work or to complete it?
Does management pressure employees to work off the clock?
Does your business have an off-the-clock policy, and are all employees aware of it?
It’s virtually impossible to prevent all off-the-clock work, but you can establish some best practices to address it like:
Improving clarity. Be clear about expectations and policy for off-the-clock work for non-exempt employees. Understand the eager team members who may take it upon themselves to work off the clock and ensure they understand these guidelines.
Being assertive. From a management point of view, be strict about task times and employee lunch breaks and establish transparent written training policies. Monitor work activities and inform managers and supervisors about off-the-clock work.
Establish policies. Employers must establish a concrete method of clocking in and out to ensure it's not abused or amendable and to control overtime. Guidelines must be clear and provide specific examples of violations to prevent misunderstandings.
Create a better work-life balance. With the emergence of laptops and smartphones, employers know employees are reachable virtually anywhere. Create a culture where it's clear that employees don't need to engage immediately while off the clock when receiving an email, Slack message, or call.
During economic downturns, it's not uncommon for employees to believe off-the-clock work is expected unless told otherwise. Employees can face discipline for this voluntary, unauthorized overtime, so here’s how you can prevent off-the-clock work:
Make it clear that you expect employees to record all hours worked. Explain how they’re supposed to track their time and mention examples of work not permitted, such as:
Checking work emails from home
Returning work-related calls after the end of their shift
Staying in the office after work hours to finish a task
Working throughout their lunch break
Creating an overtime policy will ensure that your entire team knows the company's overtime rules. This will help protect both the company and its employees.
Your overtime policy should include the following information:
Scope. Explain to whom the policy applies and whether management staff is entitled to overtime benefits.
The procedure for requesting overtime. How should employees request overtime? Who is responsible for approving overtime requests?
Compensation. How will employees be compensated for overtime? When will they receive their overtime pay?
Type of overtime. Will you be offering mandatory or optional overtime? Will overtime be limited or prohibited completely?
Limits. It's also good to limit the amount of overtime employees can work (e.g., not allowing employees who work eight hours a day to work more than four hours of overtime per week).
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Training managers and supervisors is crucial to prevent off-the-clock work. You need to help them understand what counts as off-the-clock work and explain the repercussions of allowing such work.
Additionally, you should require managers to authorize overtime and report any unauthorized overtime immediately.
If you’re already experiencing problems with overtime work, managers should pay special attention to balancing workloads properly so that team members can complete all tasks during work hours.
Also, remember that while managers are usually exempt from overtime pay, just having the job title of manager is not enough to gain exempt status. For example, in California, for an employee to be classified as a manager, their primary job duties need to include:
Directing the work of two or more employees regularly
Exercising discretionary power regularly
Having the authority to both hire and fire employees
For a manager to be exempt from overtime pay, they need to spend more than 50% of their time performing these duties. If they spend less than 50% of their time on these duties and the rest on performing tasks their direct reports also do, they might be eligible for overtime pay.
Let your team know what penalties are involved with repeating errors when clocking in and out of work.
These can range from formal verbal or written warnings to probation and even suspension. Ensure you have a mechanism to discipline team members who breach your off-the-clock policy.
You must be careful when deciding on disciplinary action for overtime violations. You’ll need to stay consistent when disciplining employees to avoid any appearance of discrimination.
Of course, you should differentiate between one-off and repeat offenses. A verbal warning best addresses one-off violations, while those violating your overtime policy multiple times might need to be disciplined more harshly.
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One way to help monitor what work your team is doing and to prevent off-the-clock work is by using a time tracking app like Hubstaff. Hubstaff helps you:
Understand when employees are working
Allows you to set daily limits
Tracks time spent on the road or at Job sites
Automatically fills out timesheets
Sets schedules to ensure people start and end shifts on time.
Hubstaff’s detailed reports can help managers track productivity trends. They allow you to see how much work team members complete and whether they stay on task.
For example, if you manage a field team, you can use Hubstaff to track workers' time at different job sites. If, on the other hand, you manage an in-office or remote team, you can set Hubstaff to track apps used and URLs visited.
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The role of managers in preventing off-the-clock work is crucial for maintaining fair labor practices, ensuring legal compliance, and fostering a healthy work environment.
Here are the key responsibilities of managers:
Policy enforcement. Managers play a central role in enforcing company policies related to work hours. They should ensure that employees know and adhere to policies that prohibit off-the-clock work.
Overtime approval. If overtime work is necessary, managers should oversee the proper approval processes. This includes obtaining authorization for overtime work and maintaining accurate records.
Training. Managers should provide employees with training and education on the importance of accurate time tracking and the potential consequences of off-the-clock work. This education can help create awareness and prevent unintentional violations.
Lead by example. Managers should set an example by adhering to established work-hour policies. Leading by example reinforces the importance of work-life balance and compliance with company regulations.
By actively fulfilling these responsibilities, managers contribute to creating a work culture that prioritizes fair compensation, legal compliance, and employee well-being, ultimately preventing off-the-clock work.
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