Business owners and executives may use a variety of policies to control operating costs. For example, an employer might establish a no-overtime policy as a way to limit the cost of staffing. By preventing workers from putting in overtime, companies can keep their operating costs predictable.
Overtime wages can significantly increase the economic pressure on a company. Unfortunately, some employees want overtime pay. They might intentionally take extra shifts or stay late every day in the hopes of accruing overtime.
Can they then sue to collect overtime wages despite the company’s policy against them?
Overtime pay is often mandatory
When companies have no-overtime policies, it is only natural to become frustrated by employee attempts to sidestep that policy. Arranging to pick up a coworker’s shift during a 40-hour week or regularly staying late despite a clear schedule could result in a worker accruing numerous hours of overtime. While their actions may technically constitute a violation of company policy, they have a right to demand pay for the time they have already worked.
Business owners and executives may need to carefully train management to oversee payroll matters and ensure that no workers manipulate the system to accumulate overtime without prior approval. In cases where employees have accumulated overtime hours, the employer usually has a legal obligation to pay them for that time. The best option is typically to proactively prevent workers from putting in more than 40 hours per week.
Learning more about employment law and establishing company policies that make operating costs predictable can help business owners and executives keep their companies profitable. Overtime wages can be a serious strain on a company’s budget without proper planning.
