Is Uncompensated Overtime Legal?

Whether it’s an employee who’s pushing a project deadline or an employee that is required to arrive early to prepare the job site, work hours outside of the standard 40-hour workweek are generally considered overtime, which requires compensation. So, yes, in most situations, uncompensated overtime is illegal. When an employee is required to work “off the clock”, it is considered uncompensated overtime. Whether you are an employer that asks employees to work off the clock or you are an employee that has been working without compensation, it’s important that you understand the Fair Labor Standards Act and how employees can recover the wages owed to them.

Working Off the Clock and the FLSA

Working off the clock means that the hours worked aren’t included in the employee’s weekly work hours and the employee has not been compensated for these hours. The Fair Labor Standards Act (FLSA) definition of “employ” includes a permit or suffer to work, which means that employers that allow or require an employee to work are required to compensate the employee. Suffered work means that the employee has done work that was not requested by the employer, but the work was permitted. For instance, if an employee clocks out, but stays to help a colleague with a project, the extra unpaid working hours is considered suffered work. 

The majority of employees are covered by the Federal Labor Standards Act, which has established minimum wage and overtime for employees. A typical workweek as defined by the FLSA is 40 hours within seven consecutive 24-hour periods and the 40 hours do not have to consecutively run from Monday through Sunday, such as if a workweek is spread across two pay periods. There are some employees that are exempt from these requirements, such as employees in commission-based sales, farm work, and executives. Otherwise, all non-exempt employees must be compensated for all hours they work. As an employer, if your employees are entitled to overtime compensation, you are required to pay, regardless of whether or not the overtime was authorized. The FLSA’s overtime rule applies if your company policy states that all overtime must be agreed upon with management in advance. If the overtime has already been worked, whether approved or not, it must be paid, which is generally one and one-half times the employee’s regular rate. 

Do All Employees Have to Comply with FLSA?

When it comes to who is responsible for paying uncompensated overtime, FLSA’s rules say that any employer that has two or more employees and does over $500,000 in business per year must comply with the rules regarding overtime hours and payments. It’s also important to add that some employees are protected by FLSA rules, even if their employer isn’t.  For instance, employees that work either indirectly or directly with products that are being sold between states or employees that provide domestic services, such as a full-time babysitter, cook, or housekeeper. Off-the-clock types of work vary, including work that is done outside of the workplace. Some examples of this type of unpaid work may include:

• Rework that has been unpaid, such as if an employee is required to redo or correct mistakes on a project without compensation for the rework
• Preparation work, such as pre-loading or warming up trucks, prepping/setting up a restaurant, or preparing the worksite
• Administrative work, such as reviewing client/customer/patient files, enduring job training on employees on time, completing paperwork, and/or meeting with management
• Post-shift work, which may include completing tasks that should have been done while working your shift, going between worksites to drop off paperwork or equipment, and/or cleaning up
• When an employee is required to wait for work or assignments when work isn’t immediately available

Can Uncompensated Overtime be Recovered?

The short answer is yes. Since work that is done off the clock may be illegal, if you file a complaint with the department of labor, you may be able to recover uncompensated overtime wages. In some situations, it may be beneficial to speak with your attorney about an overtime wage case. In most situations, employees can recover back wages up to three years of unpaid overtime or unpaid hours. In most cases, the only way an employer can avoid compensation for hours worked is if they can prove they acted in “good faith”, such as by making a special investigation into the application of the Fair Labor Standards Act in regard to specific types of employees. If you are unsure about whether or not you are entitled to pay for uncompensated over time, it’s recommended that you talk with your attorney to learn more information about the FLSA and your specific situation.

Requiring or permitting employees to work off the clock may lead to extensive liabilities for employers. Unfortunately, some employers/managers may assume that as long as they are not requiring an employee to work off the clock that the extra work is okay. However, this is not the case, because even if employees are willing and have suggested working off the clock, the employee may change their mind later and request the uncompensated overtime or hourly wage. It is essential for employers to take all steps necessary to prevent employees from working off the clock and to clearly understand which of their employees are covered by FLSA.