Employer's Policy That Prevented Employees From Being Paid For Unapproved Overtime Hours Struck Down

In January, 2008, the Second U.S. Circuit Court of Appeals in Chao v. Gotham Registry, Inc. struck down an employer's policy that said if employees were not approved by their supervisors in advance of working overtime, they would not be paid for it.

The case involved a nursing staffing agency whose nurses were sometimes asked to work overtime by hospital staff. Nurses who agreed to work overtime on occasion contacted the agency to first request approval. Sometimes the agency authorized the overtime and the nurses were paid. On many occasions, the nurses could not obtain approval in time, but would work the extra hours anyway. They would later report the extra hours on their time cards. In those instances, the agency refused to pay overtime.

Courts have long held that an employer is required to pay its employees for work the employer knows its employees are performing. This duty arises even where the employer has not requested the work be performed or does not desire the employee to work, or where the employee fails to report his work hours. Gotham Registry argued that it was not required to pay the extra work because it acquired the knowledge that is employees were working overtime only after the fact, on their time cards. The Court disagreed and held that an employer's knowledge need not arise concurrently with the performance of overtime. "[A] requirement of concurrent knowledge would allow employers to escape their obligations under the Act by purposefully eschewing knowledge as to when such work was performed."

If your employer has failed to pay you wages or overtime compensation because it was not approved in advance, contact us right away. The time period for which you can seek a payment for your unpaid wages or overtime compensation will depend on when you file a claim with a court.