To control costs, policy at Good Guys Construction Co. requires prior approval of all overtime by the owner or a supervisor. Recently, when a carpenter’s timecard showed overtime hours that hadn’t been approved, the company paid those hours at the employee’s regular pay rate. When the employee protested, Good Guys cited the company policy.

Federal Wage and Hour regulations require that all employees—unless specifically exempt—must be paid 1.5 times their rate of pay for any hours worked over 40 hours in workweek. There are no exceptions based on prior approval. This can place companies in a difficult situation when trying to control overtime costs.

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