Ask the Legal Expert about ... employees working 'off the clock'

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John Durso, Esq.  Nixon Peabody LLP
John Durso, Esq. Nixon Peabody LLP

With the new overtime pay regulations, how do we insulate ourselves from problems if we have diligent workers who might work "off the clock?"

Federal and state labor regulations require an employer to pay its non-exempt employees for the time they work, even if they work “off the clock” without the employer's knowledge. Monetary penalties can be very severe.

To help prevent employees from working “off the clock,” a facility should have a written policy that prohibits any non-exempt employee from working outside of his or her normal working hours, unless the employee has prior authorization from management. 

The policy also should impose increasing discipline on employees for failing to comply with the policy. And the facility has to enforce the policy. It must investigate and resolve any employee complaints or other issues related to off-the-clock work.

The reality is, though, the facility is responsible for paying an employee who works off the clock, even if the employee does so in violation of facility policy and the facility is unaware of the extra work. 

Therefore, facilities must monitor, as reasonably practical, their employees' actual work and seek to avoid work requirements that might lead to employees working off the clock.

The new regulations do not apply to exempt employees. Therefore, converting non-exempt employees to exempt status, where the “converted” employees meet the regulation's definition of “exempt,” is a way to avoid application of the regulations to them. 

Doing so will have its own costs, of course, and facilities will need to balance those costs with the costs of complying with the regulations.