Prior-approval FLSA guidelines on overtime alone won’t get you off the hook

Wage and Hour law says unwanted overtime must be paid, even if your company doesn’t like it

Think you’re covered against paying unplanned overtime because you have a rule requiring pre-approval of work past 40 hours?

Unfortunately, it’s not so easy. That point was stressed in a recent federal appeals court decision involving a New York-based staffing agency. DOL was seeking to make the agency pay more than $100,000 in back overtime and interest.

DID ITS BEST TO MEET FLSA GUIDELINES?

The agency pointed out that it had a rule mandating prior approval of overtime, and had warned employees they’d be paid straight time if they violated the rule. So, the agency argued, it did its best to prevent the overtime at issue, and wasn’t liable for the back pay.

Not so fast, the court said. When the agency enforced its rule merely by paying straight time to violators, it didn’t follow FLSA guidelines – to either prevent overtime or pay time-and-a-half for it.

The court said any employer that knows overtime is being performed has enough tools to put a stop to overtime it doesn’t want to pay for.

In this case, the court stated, the agency could have done a couple of things to stop the unapproved overtime:

• Keep a running tally of employees’ hours and reassign shifts later in the week that would result in overtime
• Refuse to assign any shifts to employees who habitually ignored the overtime rule.

DOL has sharpened its wage and hour law enforcement as never before, so employers need to strictly follow FLSA guidelines.

Make sure your overtime rules are being followed and if not, be prepared to discipline offenders. But pay them first.

Cite: Chao v. Gotham Registry, No. 06-2432, 2nd Cir., 1/24/08.

Issue 6.16 3-24-2008