Most business owners don’t want to ask their employees to work overtime, but sometimes it’s necessary when the unexpected happens. To avoid any misunderstandings between you and your team, it’s important to address the question: Is mandatory overtime legal?
If you’re an employee who isn’t aware of mandatory overtime laws, you may think you can refuse overtime work because of labor regulations prohibiting mandatory overtime.
On the flip side, you may be a busy employer who can’t convince their employees to pick up any overtime shifts. You aren’t well-versed in mandatory overtime and you think your hands are legally tied.
The fact is that employers can oblige employees to work overtime hours, and employees can be fired for refusing to work mandatory overtime. But there are, of course, federal agencies tasked with regulating labor and overtime — and there are ways to prevent mandatory overtime as much as possible.
So, let’s discuss what mandatory overtime is and what it means for employers and employees.
Remember that this information is not legal advice. When in doubt, always consult an employment attorney with your specific questions about labor law compliance and consequences.
What is Mandatory Overtime?
Mandatory overtime occurs when employers require hourly employees to work more than 40 hours in a workweek. The FLSA (Fair Labor Standards Act) requires employers to pay their employees time and a half, or 1.5 times, their hourly wage for every overtime hour. Overtime exemptions do exist for employees who are paid a set salary of at least $684 a week, and whose duties meet the executive, administrative, or professional duties tests outlined in the FLSA.
Is Mandatory Overtime Legal?
Yes, mandatory overtime is legal, and in general, employees cannot refuse to work overtime. The FLSA doesn’t put a limit on how many hours of overtime an employee can work — it only stipulates that employers must pay minimum wage for regular hours and overtime rates when an employee works over 40 hours a week.
There are, however, a few instances where employers cannot legally mandate forced overtime hours. Let’s look at a few examples.
Not if it violates the terms of an employment contract
If an employer clearly outlines their overtime hours and off-the-clock policies in an employment contract or contractually binding handbook and violates those terms, an employee could have a case for damages for breach of contract.
Keep in mind: While employers often require administrative, executive, and professional salaried employees to sign employment contracts, it’s more common to require an hourly employee to read and sign an employee handbook.
Employers can implement employment contracts for hourly workers, though, and they can also use contractually binding language in their employee handbooks with a legal clause at the end for an employee to sign. It’s important for employers and employees to pay attention to the legal nature of their employee agreement — especially regarding overtime terms.
Not if it poses a health or safety hazard
Mandatory overtime is illegal if it poses a health or safety risk and clearly violates the OSHA (Occupational Safety and Health Administration) General Duty Clause.
OSHA can cite an employer for a violation if all of these elements are present:
- “The employer failed to keep the workplace free of a hazard to which employees of that employer were exposed;
- The hazard was recognized;
- The hazard was causing or was likely to cause death or serious physical harm; and
- There was a feasible and useful method to correct the hazard.”
That means if an employee feels mandatory overtime would put dangerously fatigued workers at risk — and the employer takes no action to avoid the risk after it’s flagged — an employee can file a complaint resulting in an on-site OSHA inspection.
Not if you are inadequately compensated for overtime work
Employers could be at risk of illegal mandatory overtime if they don’t compensate employees adequately. Sometimes employers make common wage mistakes or implement an overtime salary threshold for non-exempt employees who actually qualify for overtime.
Employees could be missing out on required overtime compensation if their employer has:
- Misclassified them as exempt employees. According to FLSA regulations, exempt employees have to pass three tests in order to be exempt from overtime pay. First, they have to have duties that are administrative, executive, or professional in nature. They also have to be paid a salary, and that salary cannot be less than $684.
- Deducted overtime pay because of poor performance. An employer can only deduct pay when an employee misses two or more consecutive days of work for reasons other than disability, illness, or time off. Employers can also deduct pay for major safety violations or when employees are suspended from work for misconduct.
- Deducted payment for rest breaks to avoid overtime pay. As long as employees work a certain number of hours a day, employers have to pay them for breaks of 15 or 20 minutes.
- Not paid overtime for mandatory training during work hours.
Not if you have a family emergency
Mandatory overtime is not legal if an employer requires it for an employee who has a family or medical emergency and is on leave because of it.
The FMLA gives eligible employees up to 12 weeks of unpaid leave a year, entitles them to benefits during that time, and ensures they can return to the same or an equivalent job at the end of their leave period. That means they’re not subject to mandatory overtime while they’re on leave.
Not if you are a member of a union
Under the National Labor Relations Act (NLRA), which offers protections for union workers, employers may not be allowed to enforce mandatory overtime if they have come to an overtime agreement with employees as a result of collective bargaining.
Most employees have the right to organize, share information, sign petitions, and seek to improve their wages and working conditions through unionization, even if they work in a non-union workplace.
If employees choose a union to represent them in a collective bargaining agreement, an employer is required to meet them to bargain “in good faith” about wages, hours, or working conditions, including discussions about mandatory overtime.
How to Avoid Mandatory Overtime: Tips for Employers
While mandatory overtime work has advantages like increased pay and productivity, too much overtime can come with unintended consequences.
When employees feel that overtime is something ‘mandated’ and out of their control, it can lead to increased stress, decreased morale and trust, and an increase in turnover and resignations.
An excess of mandatory overtime can also motivate disgruntled employees to take legal action against a company if they see fit. Here’s how to avoid overtime and its consequences in your workplace.
Hiring part-time employees or temporary staff
Boutique salons have monthly expenses, just like roofing companies, and restaurants. These monthly expenses will be exacerbated during the busy season. Christmas time is often a hectic time of year for retail businesses, for example, and summer time tends to bring in more traffic for ice cream shops.
If you can plan and predict for these seasons ahead of time by hiring part-time employees, temporary staff, or seasonal workers, you can help reduce your reliance on mandatory overtime during busy periods.
Monitor staffing shortages to prevent overtime
Staffing shortages often put the burden of extra work — and the possibility of mandatory overtime — on other employees. Keep track of your staffing shortages to get a better sense of how you can address them.
Maybe you have enough mandatory overtime hours to justify hiring another full-time or part-time employee. Or you don’t have enough hours, but you have trainable workers who can take on more responsibilities. Sometimes preventing overtime is a just matter of getting creative with your staffing options.
Communicate clearly with your employees
For some employers, avoiding mandatory overtime can be prevented with something as simple as clear communication.
Create a culture of clear communication with your employees by always being open and honest about the likelihood of mandatory overtime in the future, and encourage them to speak up when they have concerns.
When you know that a busy time of year is coming up or have an extensive project on the horizon, talking to your employees and bringing them into the planning process can help you avoid the need for too much mandatory overtime and the need to make unexpected overtime demands on your workers.
How to Avoid Mandatory Overtime: Tips for Employees
Mandatory overtime can seem like something non-exempt employees have no say over. But employees who take the time to educate themselves on company policies, learn their rights, and negotiate overtime terms with their employer can help create a workplace that’s free of too much overtime.
Read the company policy on mandatory overtime
If you’re a worker who’s not exempt from mandatory overtime, be sure to read and understand your company’s policies on overtime, including mandatory overtime. If your employer’s policies on overtime are unclear, make sure you ask them clarifying questions like:
- Do you have a mandatory overtime policy?
- How do you compensate employees for mandatory overtime?
- How much notice do you give employees before you enforce mandatory overtime?
- How do you track mandatory overtime hours?
- What do you do if mandatory overtime poses a health or safety hazard?
If your employer doesn’t have an answer, or their answer conflicts with the FLSA or OSHA regulations, bring this up with them right away.
Read the state laws
While overtime hours are defined in the FLSA as any hours worked over a 40-hour workweek, each state has its own set of overtime regulations. For example, California’s overtime requirements state that employees who work overtime have to be compensated with a minimum of:
- “One and one-half times the employee’s regular rate of pay for all hours worked in excess of eight hours up to and including 12 hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek; and
- Double the employee’s regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek”
Visit Homebase’s state labor laws hub to access an employment law guide for your state.
Negotiate overtime terms during the hiring process
Employees can use the hiring process to negotiate the terms of their contract, and overtime terms are no exception. If you know that you’re non-exempt from overtime pay, have studied your company’s employee policies, and researched state overtime laws, you can negotiate:
- Overtime compensation: How much your employer will pay you for mandatory overtime.
- Overtime notice: How much notice your employer should give you before you have to work mandatory overtime.
- Compensatory time: This is time off given in place of overtime compensation. An employee can ask their employer to give them “comp time” off instead of getting overtime pay.
- Compensation for childcare, commuting, or other expenses that come as a result of mandatory overtime.
Remember: Knowing your overtime rights can prevent an employer from negotiating away what you’re legally entitled to.
Negotiate a cutoff for overtime hours
Employers should respect an employee’s need for rest and work-life balance, so we encourage employees to negotiate a cutoff for overtime hours during the hiring process, too.
If, for example, you feel that working more than 60 hours a week will affect your performance and pose a risk to your health, ask your employer if they can clearly stipulate a cap on overtime hours in your contract or employee agreement.
Homebase’s Role in Preventing Unnecessary Overtime
Preventing mandatory overtime isn’t always possible, but with the right planning and systems in place, you can avoid unnecessary overtime.
We created Homebase’s suite of tools to help business owners streamline employee scheduling, overtime tracking, and hiring and onboarding so they can stay compliant with overtime laws and keep mandatory overtime to a minimum.
Better employee scheduling
Employers might have to enforce mandatory overtime when they plan week-to-week and have limited visibility on who’s working and who will need time off for the month ahead.
Homebase helps businesses avoid this pitfall with automated schedules you can build weeks in advance — and your team can plan or reschedule their shifts ahead of time.
Automated tracking of overtime wages
When employers use manual time tracking and payroll systems that don’t keep them updated about how many hours each employee has worked in a week, it’s easy to slip into mandatory overtime without even realizing it.
Homebase’s free time clock syncs with your payroll timesheets to keep you on top of an employee’s regular hours, break hours, and overtime hours.
Improved hiring processes for additional employees
For busy business owners and teams trying to avoid too much overtime, the thought of taking time to hire new employees sometimes feels overwhelming, even if new hires will help reduce mandatory overtime.
Get access to customized or pre-written job description templates, top online job boards, an applicant tracking system, and applicant screening all in one place with Homebase hiring and onboarding so you can save time and hassle when hiring new workers.
Mandatory Overtime in 2024: What You Need to Know
2024 is here, and work as we know it is changing fast. For both bosses and their teams, understanding the new rules around mandatory overtime is key.
There have been a bunch of updates to labor laws, plus changes in how we work together. It’s important for everyone to keep up and be ready to adapt.
- Employers: It’s time to get creative with how you schedule and communicate about extra hours. This means thinking outside the box to manage overtime without burning out your team.
- Employees: You’ve got to stay sharp on your rights and the new rules. Knowing your stuff means you can stand up for a fair deal at work.
The goal for this year is to strike a balance. Yes, sometimes overtime is needed, but it’s got to be fair, clear, and respectful.
By aiming for this balance, companies can keep things running smoothly without wearing down their teams. It’s all about working together and respecting each other’s needs.
You Can Have Mandatory Overtime and a Happy Work Environment
While mandatory overtime can make employers uneasy and employees annoyed, it doesn’t have to cause a rift in your team.
When employers create a culture of listening, openness, and transparency around difficult issues and take the time to help employees understand why mandatory overtime is sometimes inevitable, they’re more likely to feel they’re on the same team as their bosses, even in tough situations.
FAQs about mandatory overtime
Can an employer force you to work overtime?
An employer can force you to work overtime. According to the FLSA, they can require you to work any hours over a regular workweek, which is 40 hours. If an employer requires you to work overtime, they’re legally obliged to pay you time and a half, or 1.5 times your regular hourly pay rate.
Are there exceptions to working overtime?
The FLSA offers exemptions from mandatory overtime to executive, administrative, professional, and outside sales employees. To qualify for overtime exemptions, employees’ job descriptions have to pass the duties tests outlined in the FLSA for each of those roles, and a job title alone doesn’t count. Employers also have to pay exempt employees a minimum of:
- $684 a week for executive, administrative, and professional employees
- $684 a week or $27.30 an hour for computer professionals
- $107,432 a year for highly compensated employees, or employees who, according to the IRS, make $130,000 from the employer who sponsors their 401(k) or who owns more than 5% interest in their company.
Can employees who refuse to work overtime be fired?
Yes, an employee who is not exempt from overtime rules and who refuses to work overtime can be fired. as long as they’re not terminated for an illegal reason. An employee may have a case for wrongful termination if they feel they were actually fired based on:
- Discrimination: Different or poor treatment based on race, gender, national origin, disability, age, pregnancy, medical background, religion, or genetic information
- Retaliation: An action taken against an employee because they filed a complaint about discrimination or harassment
Can an employer require you to work overtime without notice?
Yes, an employer can require you to work overtime without notice. They cannot, however, ask you to work off-the-clock without violating the FLSA regulations.
Employers should keep in mind that if an employee qualifies for overtime hours, they qualify for overtime pay, and employers should closely monitor that they accomplish their tasks within the overtime hours. If an employee gets paid hourly and their duties don’t meet the requirements for overtime pay exemption, employers have to pay them time and a half for any overtime hours.
Remember: This is not legal advice. If you have questions about your particular situation, please consult a lawyer, CPA, or other appropriate professional advisor or agency.
