Practice Areas

Can An Employer Ask An Employee To "Give Up" Overtime Pay?

September 2011

By: Nancy E. Joerg, Esq.

No, an employer cannot - under either state or federal law - require (or even ask) an employee to agree to give up overtime pay if the employee has worked and earned compensable overtime hours. By law, the employee has earned the overtime.

Unfortunately, some employers mistakenly rely on agreements with employees. The employer might even be talked into the illegal arrangement by the employee! For example, maybe an employee needs the extra income and offers to work the weekend for straight time and the employer agrees to help out. However, under both state and federal law, overtime pay may not be waived by the employee by oral or written agreement. An oral or written agreement that only eight hours a day or only 40 hours a weeks will be counted as working time (despite actual hours worked) also fails the test of overtime compliance.

Announcements by the employer or a policy in the employee handbook stating that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, will not impair the employee's right to compensation for compensable overtime hours that are worked.

The bottom line is that if an employee is entitled to overtime under state or federal law, the company has liability for overtime-regardless of any private contract between the parties. Many employers have been shocked to discover this upon a state or federal overtime audit, even when the employees don't want the overtime. The outcome of an overtime audit will not be influenced by the protests of loyal employees stating "We agreed not to be paid overtime; we agreed to straight time." Parties cannot agree to violate wage and hour laws. It is a high-risk and ultimately unsuccessful business practice.

Questions about overtime laws or exempt/non-exempt classifications? Please contact WS Shareholder and Senior Attorney Nancy E. Joerg at 630-377-1554 or najoerg@wesselssherman.com.