Mandatory Overtime: Can You Require Long Hours?

Most business owners don't want to require their employees to work overtime, but sometimes it's necessary when something unforeseen happens. To avoid misunderstandings between you and your team, it's important to maintain clear and accurate employee information. This ensures everyone is on the same page regarding policies and expectations, including the legality and conditions of mandatory overtime.

If you're an employee who doesn't know the laws about mandatory overtime, you might think you can refuse to work overtime because labor regulations prohibit mandatory overtime.

On the other hand, you might be a busy employer who can't persuade your employees to work overtime. You're not familiar with the overtime requirement and think your hands are tied legally.

Employers retain the right to mandate overtime, with employees facing potential termination for refusal. However, federal agencies oversee labor laws, including overtime regulations, offering avenues to minimize mandatory overtime. Effective document management can play a crucial role in demonstrating workload constraints and negotiating alternatives to excessive overtime demands.

So let's discuss what mandatory overtime is and what it means for employers and employees.

What is mandatory overtime?

Mandatory overtime occurs when employers require their employees to work more than 40 hours in a workweek. Under the FLSA (Fair Labor Standards Act), employers are required to pay their employees one and a half times or 1.5 times their hourly wage for each hour of overtime. Exceptions to the overtime rule exist for employees who receive a fixed salary of at least $684 per week and whose duties meet the managerial, administrative, or professional tests outlined in the FLSA.

Is mandatory overtime legal?

Yes, mandatory overtime is legal, and generally, employees cannot refuse to work overtime. The FLSA does not specify how many hours of overtime an employee can work - it simply requires that employers must pay the minimum wage for regular hours and overtime premiums if an employee works more than 40 hours per week.

However, there are some cases in which the employer cannot mandate forced overtime. Let's look at a few examples.

Not if it violates the terms of the employment contract

If an employer clearly sets out its overtime and time off policies in an employment contract or contractually binding handbook and violates those terms, an employee can seek damages for breach of contract.

Remember: While employers often require administrative, managerial and professional employees to sign employment contracts, it is more common to require hourly employees to read and sign an employee handbook.

However, employers can also create employment contracts for hourly employees, and they can also use contractually binding language in their employee handbooks that include a legal clause at the end that the employee must sign. It is important that employers and employees pay attention to the legal nature of their employment contract - especially as it relates to the overtime policy.

Not if it poses a health or safety hazard

Mandatory overtime is illegal if it poses a health or safety hazard and clearly violates OSHA's (Occupational Safety and Health Administration) General Duty Clause.

OSHA can sue an employer for a violation if all of these elements are present:

• "The employer failed to keep the workplace free from a hazard to which its employees were exposed;
• The hazard was recognized;
• The hazard caused or was likely to cause death or serious bodily harm; and
• There was a feasible and useful method of eliminating the hazard.

This means that if an employee believes mandatory overtime would result in dangerous worker fatigue - and the employer fails to take steps to avoid the risk after being made aware of it - they can file a complaint that results in an on-site OSHA inspection.

Not if overtime is inadequately compensated

Employers can put themselves at risk of illegal mandatory overtime if they fail to adequately compensate their employees. Sometimes employers make mistakes in pay or set an overtime salary threshold for non-exempt employees who are actually eligible for overtime.

Employees could miss out on mandatory overtime pay if their employer:

• Misclassified them as exempt employees. Under FLSA regulations, exempt employees must meet three tests to be exempt from overtime pay. First, they must have duties that are administrative, executive or professional in nature. They must also earn a salary, and it cannot be less than $684.
• Deducted overtime pay for poor performance. An employer can only make deductions from pay if an employee misses two or more consecutive days of work for reasons other than disability, illness, or time off. The employer can also withhold pay for serious safety violations or when employees are suspended from work for misconduct.
• Deducting pay for rest breaks to avoid overtime premiums. As long as employees work a certain number of hours per day, employers must pay them 15- or 20-minute breaks.
• No overtime pay 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 takes leave because of it.

The FMLA grants eligible employees up to 12 weeks of unpaid leave per year, entitles them to benefits during that time, and ensures that they can return to the same or equivalent job after the leave expires. This means they are not required to work overtime while on leave.

Not if you're a member of a union

Under the National Labor Relations Act (NLRA), which provides protection for unionized workers, employers may not be allowed to enforce mandatory overtime if they have an overtime agreement with their employees through collective bargaining.

Most workers have the right to organize, share information, sign petitions, and seek to improve their wages and working conditions, even if they work in a nonunion workplace.

If workers choose a union to represent them through a collective bargaining agreement, the employer is required to negotiate with them 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 has benefits such as higher wages and productivity, too much overtime can also have unintended consequences.

When employees feel that overtime is something "mandated" that they have no control over, it can lead to increased stress, lower morale and trust, and more turnover and resignations.

An excess of mandated 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 or Temporary Employees

Boutique salons have monthly expenses, just like roofing companies and restaurants. These monthly expenses are magnified during peak seasons. The holiday season is often a busy time for retail stores, and summertime often brings more traffic for ice cream parlors.

If you can plan ahead and anticipate these seasons by hiring part-time, temporary, or seasonal workers, you can help reduce your reliance on mandatory overtime during busy periods.

Monitor staff shortages to avoid overtime

Staff shortages often result in other employees being burdened with extra work—and thus potentially having to work overtime. Keep an eye on your staff shortages to get a better sense of how to fix them.

Perhaps you have enough mandatory overtime to justify hiring another full-time or part-time employee. Or you don't have enough hours, but you have qualified employees who can take on more responsibility. Sometimes avoiding overtime is just a matter of being creative with staffing.

Communicate clearly with your employees

Some employers can avoid mandatory overtime simply by communicating clearly.

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 encouraging them to raise their concerns.

If you know a busy time of year is coming up or a large project is coming up, talking to your employees and involving them in the planning process can help you avoid too much mandatory overtime and having to make unexpected overtime demands on your employees.

How to Avoid Mandatory Overtime: Tips for Employees

Mandatory overtime may seem like something that non-exempt employees have no control over. But employees who take the time to learn about company policies, learn their rights, and negotiate overtime terms with their employer can help prevent too much overtime in the workplace.

Read Company Policies on Mandatory Overtime

If you are an employee who is not exempt from overtime, you should read and understand your company's policies on overtime, including mandatory overtime. If your employer's overtime policies are unclear, be sure to ask them clarifying questions like:

• Is there a mandatory overtime policy?
• How is mandatory overtime paid?
• How much lead time do you give employees before ordering mandatory overtime?
• How do you record mandatory overtime?
• What do you do if mandatory overtime poses a health or safety risk?

If your employer doesn't have an answer, or their answer conflicts with FLSA or OSHA regulations, you should raise it with them immediately.

Read State Laws

While overtime is defined in the FLSA as any hours in excess of a 40-hour workweek, each state has its own overtime regulations. For example, California's overtime regulations state that employees who work overtime must be compensated at a minimum rate:

1. "One and a 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 a workday and for the first eight hours on the seventh consecutive workday in a workweek; and
2. Twice the employee's regular rate of pay for all hours worked in excess of 12 hours in a workday and for all hours worked in excess of eight hours on the seventh consecutive workday in a workweek.

Negotiate Overtime Terms During the Hiring Process

Employees can use the hiring process to negotiate the terms of their employment contract, and that includes overtime policies. If you know you are not exempt from overtime pay, have studied your company's employee policies, and have read up on each state's overtime laws, you can negotiate:

• Overtime pay: How much your employer will pay you for mandatory overtime.
• Overtime notice: How much advance notice your employer must give you before you must work mandatory overtime.
• Compensatory time: This is time off that is given in lieu of overtime pay. An employee can ask their employer to give them "time off" in lieu of overtime pay.
• Compensation for child care, travel expenses, or other costs incurred by working mandatory overtime.

Remember: Knowing your overtime rights can help prevent your employer from taking away what you are legally entitled to.

Negotiate a cap on overtime

Employers should respect employees' need for rest and a work-life balance, so we encourage employees to negotiate a cap on overtime, including during the recruitment process.

For example, if you feel that working more than 60 hours a week is affecting your performance and poses a risk to your health, ask your employer if they can set a clear cap on overtime in your contract or company agreement.

IceHrm's role in preventing unnecessary overtime

Avoiding mandatory overtime is not always possible, but with the right planning and systems in place, you can avoid unnecessary overtime.

We've developed a range of IceHrm tools to help businesses streamline employee scheduling, overtime tracking, and recruitment and onboarding so they can comply with overtime laws and keep mandatory overtime to a minimum.

Better workforce scheduling

Employers may need to enforce mandatory overtime when they plan week-to-week and have limited visibility into who is working and who needs to take time off for the coming month.

IceHrm helps businesses avoid this pitfall with automated schedules you can create weeks in advance—and your team can plan or re-schedule their shifts in advance.

Automated overtime wage tracking

When employers use manual time tracking and payroll systems that don't keep them up to date on how many hours each employee has worked in a week, it's easy to slip into mandatory overtime without even realizing it.

IceHrm's free time clock syncs with your payroll timesheets, so you always have a clear view of an employee's regular hours, break times, and overtime.

Improved hiring processes for additional employees

For busy business owners and teams trying to avoid too much overtime, the thought of hiring new employees is sometimes overwhelming, even if the new hires help reduce mandatory overtime.

With IceHrm, you have access to customized or pre-built job description templates, top online job boards, an applicant tracking system, and candidate screening - all in one place to help you save time and hassle when hiring new employees.

Mandatory Overtime in 2024: What You Need to Know

2024 is here, and work as we know it is changing fast. It's important for both bosses and their teams to understand the new rules around mandatory overtime.

There are a number of updates to employment laws and changes to the way we work together. It's important that everyone stays up to date and ready to adapt.

• Employers: It's time to get creative when it comes to how you plan and communicate overtime. That means you need to think outside the box to manage overtime without overwhelming your team.
• Employees: You need to stay up to date on your rights and the new regulations. Knowing your stuff will help you advocate for a fair arrangement at work.

The goal for this year is to find a balance. Yes, sometimes overtime is necessary, but it needs to be fair, clear and respectful.

By striving 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.

Mandatory overtime and a happy work environment are possible

While mandatory overtime can make employers uncomfortable and employees angry, it doesn't have to lead to a team split.

When employers create a culture of listening, openness and transparency around difficult issues and take the time to explain to employees why mandatory overtime is sometimes unavoidable, they are more likely to feel like they are on the same team as their bosses, even in difficult situations.

Mandatory overtime can be challenging, but with clear policies and tools like IceHrm, businesses can effectively manage and minimize it, ensuring a fair and balanced work environment.