HR Management & Compliance

Ask the Expert: Can We Refuse to Pay Unauthorized Overtime?

Question: Can an employer refuse to pay an employee for time worked and/or overtime, if employee did not clock in for this time worked? Can an employer refuse to pay an employee for overtime, if company policy clearly states that overtime must have prior approval?

unauthorized overtime

Answer from the experts at HR.BLR.com:

Thank you for your inquiry regarding whether an employer can refuse to pay an employee for hours worked.

Employees who clock in and out in order to be paid are usually nonexempt and only paid for the hours they work. However, the fact that an employee clocked in before performing work or otherwise broke the employer’s rules does not give the employer the right to withhold the employee’s pay.

In instances where employees repeatedly fail to punch the time clock, get approval for overtime, or otherwise break the employer’s rules, the employer may discipline the employee. However, this discipline may not include withholding the employee’s pay or docking the employee’s pay when that pay is for hours worked.

A good strategy in these cases is to use the company’s discipline procedure. For instance, many companies use a three or four step disciplinary process. The first time an employee violates an employer’s policy, he or she receives a verbal warning. The second time a written warning. The third time, depending on the company’s policies, might include an unpaid suspension when the employee does not report to work. Finally, the employee might be terminated for repeatedly failing to follow company rules and policies.

The disciplinary approach set forth in the preceding paragraph is an illustration. Companies should follow their own disciplinary procedures and make sure employees are treated in a fair and consistent manner.