Illegal, Illegal, Legal: Your Options for Limiting Overtime

“When it comes to overtime, can we notify employees that if it’s unauthorized, it won’t be paid?”

I typically see this issue manifest itself in two illegal ways:

  1. Agreements to forego overtime; and
  2. No pay for unapproved overtime.

Problem 1: An agreement or policy employees sign, which indicates that they won’t receive overtime

The Fair Labor Standards Act (FLSA) sets the method by which overtime pay must be calculated and the conditions under which it must be paid. It prohibits agreements stating that “no overtime will be paid” and requires that employers pay their non-exempt employees for any and all overtime worked. Period. No ifs, ands, or buts.

Even if you have a signed policy or agreement in place, the employee retains their rights to the pay, and you are still obligated to pay it. An agreement or policy to the contrary serves as evidence – and not the good kind.

Problem 2: A policy that implies working overtime is futile because unapproved overtime will not be paid

Like any business, healthcare practices are required to pay employees for any and all time worked, whether or not you have approved it beforehand. If your policy (whether written or not) is not to pay overtime that isn’t approved, you are setting yourself up to face legal action. That policy is equivalent to you personally handing the opposing attorney or the DOL investigator all the evidence they need to use against you in a “wage & hour” complaint. Again – not the good kind!

So what’s the (legal) solution?

You can and should include policies in your employee handbook that state that working overtime must be pre-approved, and that working unauthorized overtime is discouraged and may be grounds for corrective action up to and including termination. That type of policy is really your only recourse for an employee who is frequently working unauthorized time. Namely, you can address the unapproved hours with th employee, but you can’t deny them the pay.

Never “beat up” an employee who works extra hours because they want to do a better job or help out your business. It’s fairly easy to tell when someone is abusing your overtime policy. Just call them out on it and investigate to see if the work is legitimate. If so, discuss ways to keep it inside normal work hours.

If you have one of the policies described above, you may want to consider recruiting someone like CEDR. It is our job to understand and craft HR policies in order to prevent the problems that arise from scenarios like these. Call us at 866-414-6056 or email

Friendly Disclaimer: This information is general in nature, and not intended to replace good counsel about a specific issue with either your attorney or your favorite HR expert.

Oct 15, 2013

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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