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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?
These are not easy questions to answer. Let’s start by defining off-the-clock work and then go over the laws and regulations surrounding it. Finally, we’ll talk about different strategies 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 how to handle 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 purposes.
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 compensation for overtime 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.
Doing preparations for a shift – Certain jobs require specific preparation to be done before an employee can start their shift. However, doing pre-shift work by preparing for a shift outside of work hours counts as working off the clock.
Being pressured by management – If an employee gets assigned a task they need to complete by the end of the day, but they’re unable to do so, they might feel pressured to keep working on the task after work hours.
Federal law requires that all work performed by non-exempt employees must be paid for, including overtime pay.
This all falls under the Fair Labor Standards Act's minimum wage and overtime standards.
An employer opens themselves up to litigation if their timekeeping procedures do not accurately reflect when their hourly employees begin or end a shift.
Off-the-clock work includes any pre-shift or post-shift work, whether it was specifically assigned or not.
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.
In other 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.
Off-the-clock work that must be paid also includes staying late with a customer, the employee deciding to arrive early to get a start on the day, or continuing to complete job duties from the employer's premises after they’ve clocked out.
People who are exempt from these protections are usually in management positions or salaried employees.
The list includes, but isn't limited to, executives, administrative personnel, certain professionals (including teachers and administrative personnel in elementary and secondary schools), outside sales, and certain computer professionals.
Also exempt are employees of certain seasonal amusement or recreational establishments, seamen employed on foreign vessels, farmworkers, and casual babysitters.
Exempt employees must make more than $684 per week. They are also exempt from overtime pay and are often paid a salary wage.
If a worker believes they are owed back pay, they can file a complaint with the Department of Labor's Wage and Hour division for any unpaid overtime for up to three years of employment as well as liquidated damages equal to what a former employee is owed.
The pandemic has brought in a large increase in remote work, but the FLSA doesn’t change. It’s up to the employer to establish a policy to prevent unwanted off-the-clock work, and even then, an hourly employee must still be paid for all work completed.
"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."
The Department of Labor clarified this on Aug. 24, 2020, for the current pandemic environment, saying that an employer's obligation to "make every effort" to prevent unwanted work being performed away from the employer's worksite or premises is not boundless.
This is because an employer can’t make any effort — let alone every effort — to prevent unwanted work 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 for this work, whether it's in-office or remote. They must also investigate any potential unreported off-the-clock work to ensure they're paying employees for all work performed.
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 being given sufficient time during their shift to put on a uniform or protective equipment?
Are employees paid overtime for staying late to finish helping a customer?
Do employees arrive before their shift starts and stay after the shift ends for prep work or to complete their work?
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?
Be clear about expectations and policy for off-the-clock work for non-exempt employees. Have an understanding about who the eager workers are that may take it upon themselves to work off the clock and make sure they understand these guidelines.
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.
Employer guidelines need to be clear and provide specific examples of violations to prevent misunderstandings.
Employers need to establish a concrete method of clocking in and out to ensure it's not abused or amendable and to control overtime.
Limiting access to technology is crucial to ensure employees work when they are scheduled to be on the clock. With the emergence of laptops and smartphones, employers also know employees are reachable virtually anywhere.
If an after-hours work policy is not created by the employer, supervisors may leave the impression it's expected.
During economic downturns, it's not uncommon for employees to believe off-the-clock work is an expectation unless told otherwise. Employees can face discipline for this voluntary, unauthorized overtime.
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 your entire team is aware of the company’s overtime rules. It will help to protect both the company and its employees.
Your overtime policy should include the following information:
Scope – Explain who the policy applies to 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 set a limit on the amount of overtime employees can work (e.g., not allowing employees that work for eight hours a day to work more than four hours of overtime per week).
Training managers and supervisors is crucial for preventing 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 to happen.
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, keep in mind that while managers are usually exempt from overtime pay, just having the job title of manager is not enough for gaining 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 on a regular basis
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 types of 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 making repeat errors with clocking in and out of work.
These can range from formal verbal or written warnings to probation and even suspension. Make sure you have a mechanism in place to discipline team members that breach your off-the-clock policy.
You do need to be careful when deciding on disciplinary action for overtime violation. 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. One-off violations are best addressed by a verbal warning, while those violating your overtime policy multiple times might need to be disciplined in a more serious way.
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, track time spent on the road or at job sites, automatically fill out timesheets, and set schedules to make sure 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 are completing and whether they’re staying on task.
If you manage a field team, for example, you can use Hubstaff to track how much time workers are spending 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.
Automate time tracking, manage employee schedules, and more