An employee clocks out at 5:00, then spends another half hour finishing a customer order. The supervisor knows it is happening.
Months later, the employee claims unpaid wages.
The employer has a perfectly reasonable response: “Our policy prohibits overtime without prior approval.”
There is just one problem.
A rule against unauthorized overtime does not necessarily eliminate the obligation to pay for the work.
Under the Fair Labor Standards Act, work performed by covered, nonexempt employees generally counts as compensable time when the employer knows, or has reason to know, it is being performed. That can include work outside scheduled hours, even when the employee did not obtain permission.
This does not mean employees get to decide their own schedules.
Employers can establish working hours, require advance approval for overtime, and address violations of those rules. A business has every right to manage when its employees work.
But controlling the hours and compensating employees for hours actually worked are two different issues.
The distinction becomes especially important with remote work, after-hours emails, and employees who routinely finish assignments after clocking out.
Of course, not every allegation of off-the-clock work establishes a wage violation. What work actually occurred, what the employer knew or reasonably should have known, and whether the time was properly reported can all matter.
The trouble begins when an employer assumes that its written policy answers all those questions.
It doesn't.
An employee may violate a legitimate workplace rule and still be entitled to compensation for work performed.
The Velvet Hammer takeaway: An employer can prohibit unauthorized work. But whether that work must be paid for is a separate question.
Wage-and-hour issues can be difficult to navigate, particularly when timekeeping disputes overlap with employee discipline and operational concerns. The Law Center of Amy E. Davis is always here to help.