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How employers can best defend against/prevent claims for unauthorized overtime

On Behalf of | Jan 22, 2024 | Employment Law

Among the many challenges employers face is managing unauthorized overtime. One or two employees working extra hours without permission may seem nomimal , but the cost substantially increases if additional employees do the same. How employers handle this situation can affect their compliance with California labor laws.

Employers in California must pay all overtime hours

Employers in California must compensate employees for all hours worked, including overtime. California’s Labor Code makes it clear that employees are entitled to overtime pay for hours worked beyond a 40-hour week.

However, there is an exception. Employers do not have to pay for overtime work they could not have known about. Additionally, employees cannot deliberately prevent their employer from knowing about overtime worked.

Although paying unauthorized overtime is difficult to accept, it is crucial for compliance with the law. Failing to abide by the law may result in legal action and/or penalties. The law requires employers to accurately track and record employee hours and prevent unauthorized overtime.

The law seems to favor workers, but it also gives employers considerable freedom in dealing with the issue of unauthorized overtime.

The importance of robust company policies

Unauthorized overtime may be reduced when both employers and workers are aware of their rights and responsibilities. Clear, well-communicated company policies that set the expectations for seeking overtime help ensure that workers realize the importance of obtaining authorization first and the penalties for noncompliance.

Although employers cannot legally withhold pay for unauthorized overtime, they can discipline employees who continue to ignore company policy. Potential penalties include verbal warning, suspension and, in extreme cases, termination. However, employers must remember to enforce discipline fairly and consistently.

Managing unauthorized overtime can be difficult, but it does not need to be a recurring problem with the right approach. A firm understanding of California employment law can guide employers to respect employee rights while protecting business interests.