Unauthorized Work

[CSKTGRL]

What is the name of your state? Texas

I am not sure if this is the correct forum but I'm going to try it.

I work for a medical staffing company that is constantly having to pay overtime to employees where it is not authorized by our client company (and, therefore, not payable by them). I know that there is a section in FLSA (29 CFR 785.11) that basically says that we don't have to pay the employees for overtime if we don't authorize it but the key is that we have to enforce it. My question is: How do we enforce it? And, how do we do this in a way where we don't get in trouble? Lastly, how do we pay for that time if they do work over 40 hours (straight time or not at all)?

Any help you could give would be very helpful!

Thanks!

 

[cbg]

Whoa, whoa, whoa!

NO. That is absolutely incorrect. You DO have to pay for all work that is actually performed REGARDLESS of whether it is authorized or not.

Under the Fair Labor Standards Act, you MUST pay for every hour worked EVEN IF IT IS UNAUTHORIZED. There is NO provision ANYWHERE allowing you to withhold pay for unauthorized work. I cannot emphasize that enough. You can get into SERIOUS trouble if you try that.

Here are two things that hold REGARDLESS of whether the work was authorized or not:

1.) You MUST pay for every hour worked
2.) You MUST pay every hour over 40 in a week at time and a half.

You CAN discipline the employee who performs unauthorized work in other ways, just not by withholding pay or benefits (forbidden under ERISA). You can suspend them, make them work on a holiday (although they will have to be paid for that too), refuse to permit them to take a vacation or personal day (vacation and personal time is not an ERISA protected benefit although I would not advise taking time away from them - refusing to authorize a day off is another matter), reduce their wage (you MUST give advance notice of this), put a written warning in their file, or any other way you see fit that does not involve the withholding of pay or protected benefits. In fact, you can even fire them if it's blatant enough. But you CANNOT, CANNOT, CANNOT allow them to work without pay.

 

[JETX]

"I work for a medical staffing company that is constantly having to pay overtime to employees where it is not authorized by our client company"
*** Why is the employee working unauthorized overtime?? Simply make sure that all parties, employees and clients alike, understand that overtime is NOT to be worked unless authorized by the client. That should eliminate any further problems.

 

[CSKTGRL]

Well, they are putting themselves into overtime by coming in early or leaving late or not taking lunches.

I have a book (published by the American Payroll Association) that says:

"An employer needn't pay for, or count as time worked, work that is done against its instructions and without it's knowledge. However, where the employer or its agent (e.g., managers, supervisors) knows of and permits unauthorized work, it must pay for it and count the time as actual working time [29 CFR 785.11]."

Does that not translate into us not having to pay for the overtime if we specifically tell them not to do it?

I can't believe that we, as employers, are not protected at all from this problem. We cannot take away vacations, holidays, paid time off, etc., because, as temporary employees, they are not eligible for it. Also, if the client where the temporary works does not approve the overtime, we cannot bill them for it. We end up losing a lot of money. Any idea what our recourse is?

 

[cbg]

I don't care who published the book, it is wrong. Here is the link to the exact law taking you to the DOL website:

http://www.dol.gov/dol/allcfr/Title_29/Part_785/29CFR785.11.htm

Read that, and the next two pages, and then come back and tell me you're allowed to withhold pay.

 

[HomeGuru]

Well, they are putting themselves into overtime by coming in early or leaving late or not taking lunches.

**A: why is there no SOP or if there is one, why is this issue not enforced.
It should be a simple matter to deal with.

Effective immediately, all employees........

 

[Beth3]

I agree entirely with cbg. That reference book is totally incorrect. An employer must pay for all time worked by non-exempt employees whether it is authorized or not.

The proper way to address this is to inform your employees that they may NOT work anything other than their assigned work schedule unless they have specific authorization to do so. Then discipline those employees who don't follow the rules - but you still have to pay them.

It also sounds like you need to speak to your clients too. They may not be authorizing the OT but they are "suffering" the employees to work. Perhaps some of them realize they're getting a free ride on OT hours so they've been happy with the arrangement thus far???

 

[CSKTGRL]

We are actually contacting our labor attorney now and I will let you all know what the outcome is.

There have been several cases regarding similar circumstances; some the employee won and some the employer won.

Since we are the employer, we are allowed to limit the amount of overtime worked. However, since the employee is not working in our presence, we are not aware of hours worked and, therefore, not "suffering" the time. The beginning of the law says "work not requested but suffered or permitted is work time". We are not suffering the time, the client (who is not their employer) is telling them that it is okay, when they do not have the right to do so. It's a very sticky situation and I will let you all know the outcome.

Thanks for all of your help.

 

[Beth3]

Yes, but the client becomes your "agent" as it relates to supervising these employees on the job site. If they are "suffering" the time, then you certainly should bill the clients for the OT. Sounds like they're taking complete advantage of the situation. They're not formally approving the OT but they are allowing these employees to work and then refusing to pay for the time. You're getting screwed. Seems to me insisting the clients pay for the time worked is the proper course of action, not refusing to pay the staffers who appear to be working the extra time in good faith.

 

[CSKTGRL]

Good point!!

Everyone is losing here, the problem is that we are the only ones losing financially. As soon as we get to the bottom of this, I'll let you guys know. There has to be a solution!

 

[JETX]

And the SOLUTION has already been given on this forum many times.

1) Make it VERY clear that an employee is NOT to work more than 40 hours per week without specific written authorization. And make it very CLEAR that anyone doing so will be subject to reprimand and possible termination.

2) Then make sure that your clients know that THEY must authorize any work over 40 hours per week, and that work will be billed at overtime rates. If necessary, revise your client agreements to reflect any 'signed' timesheets showing in excess of 40 hours without authorization will be deemed approved for overtime rates.... and billing.

And revise your 'client timesheet forms' to reflect this policy.