But we didn’t tell him to work off the clock -do we still have to pay overtime?

Posted on May 29, 2015

Many employers have been faced with this situation. An employee who is classified as non-exempt and so entitled to overtime decides to do some work from his home computer at night—maybe to score some brownie points with a hard-to-please supervisor or maybe to make up for a failure to get enough done during the workday. Or an employee clocks out, but then sticks around and helps some friends on the next shift get some things done. Regardless of the reason, if an employee voluntarily decides to do some work off the clock and management knows about it, unless he qualifies for an exemption under the FLSA, an employer must pay him—and at the overtime rate for hours that exceed forty in a week.

Under the FLSA, “employ” is defined to mean “to suffer or permit to work.” 29 U.S.C. §203(g). What this means is that an employer must compensate its employees for work even where it is not expressly authorized as long as it is performed with the knowledge and acquiescence of management. As one court has explained, “one’s motivation for performing off-the-clock work is not relevant for FLSA purposes if the employer knows or should have known about it.” Butler v. DirectSAT USA, LLC, 47 F. Supp. 3d 300, 309 (D. Md. 2014).

The regulations specifically address this issue. 29 C.F.R. § 785.11 provides:

Work not requested but suffered or permitted is work time. For example, an employee may voluntarily continue to work at the end of the shift. He may be a pieceworker, he may desire to finish an assigned task or he may wish to correct errors, paste work tickets, prepare time reports or other records. The reason is immaterial. The employer knows or has reason to believe that he is continuing to work and the time is working time.

This rule also applies to work “performed away from the premises or the job site, or even at home.” 29 C.F.R. § 785.12. If the employer knows or has reason to know that the employee is doing work away from the job, it must be counted as hours worked. Id. Furthermore, the regulations specifically provide that it is “the duty of management to exercise its control and see that the work is not performed if it does not want it to be performed.” 29 C.F.R. § 785.13. Management “cannot sit back and accept the benefits without compensating for them.” Id.

This is a frustrating rule for some employers. After all, if an employee is electing to do some additional work without having been ordered to do so, it seems like the employer shouldn’t be on the hook for overtime. Unfortunately, the law dictates otherwise.

So what should employers do? First, it is best to make sure to have a policy specifically providing that overtime work must be authorized and disallowing off the clock work for non-exempt employees. Secondly, strictly enforce this policy. When an employee violates the policy and works off the clock, he or she needs to be disciplined (along with, of course, being compensated for the work).

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