We have a manager who has presented HR with a list of accumulated lieu time. They have over 100 hours of lieu time under a Director who has since left the organization and there is no proof of approval. Our policy states that managerial roles are not eligible for lieu time. I know that managerial roles are not eligible for overtime, but I am worried about the legalities of having a policy that doesn’t allow managers to have some flexibility for lieu time. What are the risks with this situation if we say no? What are the risks with this policy?
A common misconception is that salaried employees are not entitled to overtime. No such exception exists. Whether an individual is paid an hourly wage or an annual salary in no way impacts their eligibility to receive overtime pay.
Managers and supervisors are among the categories of employees who are not entitled to receive overtime pay, even if they work more than 44 hours in a week. However, the title of “manager” or “supervisor” does not automatically exempt an employee from overtime pay. Rather, it is the character of the work performed by the individual that must be considered. What many don’t realize is that managers or supervisors will retain their entitlement to overtime if they perform non-supervisory or non-managerial tasks on more than an irregular or exceptional basis.
Employees are regularly told that they are not entitled to receive overtime pay because they did not receive prior approval from the company for the extra hours worked. In these cases, companies will often point to clauses in employment agreements or policies that state that prior approval is necessary for overtime hours. This is false.
Pursuant to the law, work hours include activities performed by an employee for the employer, even if the employment contract or a policy forbids or limits hours of work or requires the employer to authorize extra hours of work in advance. If an individual is required to complete a task that legitimately requires him or her to work overtime hours, he or she is entitled to receive overtime pay even if the employer did not approve the additional hours. However, employees must be mindful that failure to follow an overtime policy could, in some circumstances, be a disciplinary issue.
What you pose is a very interesting issue, however, because there is no record of the agreement of time in lieu, and the director is no longer with the company. Unfortunately, case law shows that the burden of proof is on the employer to show that this agreement was not in force. You may want to negotiate a settlement in this case and amend your policy to reflect a maximum overtime allotment without formalized written consent.