Overtime Approval Policy: Free Template and Rules for Unapproved Overtime
Quick Answer
An overtime approval policy says when employees need permission to work overtime, who can approve it, how to request it and what happens if someone works overtime without approval. Under federal law, non-exempt employees must still be paid for all overtime they actually work, approved or not. Employers can enforce the policy through normal discipline, but they cannot refuse to pay for time worked.
Overtime has a way of sneaking up on a business. A few extra minutes at the end of a shift, someone staying late to finish a job, a weekend catch-up nobody mentioned. By the time payroll runs, the hours are already worked, and they have to be paid.
An overtime approval policy helps you plan overtime instead of discovering it. This guide explains what the policy should include, what the law says about unapproved overtime, how to request and approve it and a free template you can copy and adapt.
Note: This is general information, not legal advice. Overtime rules vary by state, so check the rules where your team works.
What Is an Overtime Approval Policy?
An overtime approval policy is a written rule that tells non-exempt employees when they need permission before working beyond their scheduled hours, who can give that permission and how to ask. It usually covers how far in advance to ask, what counts as an emergency, how approvals are recorded and what happens when overtime is worked without approval.
The goal isn't to stop overtime. Sometimes overtime is the right call: a big job, a coverage gap or a busy season. The goal is to make overtime a decision, not a surprise.
Why You Need One
- Control labor costs. Overtime at time and a half adds up fast. See labor cost percentage.
- Plan coverage. Approved overtime can be spread fairly instead of falling on the same few people.
- Reduce burnout. Constant unplanned overtime wears people down.
- Clear expectations. Employees know exactly what to do when work runs long.
- Better records. Approvals create a paper trail that explains why hours were worked.
What the Law Says About Overtime
Federal Overtime
Under the Fair Labor Standards Act, non-exempt employees must be paid at least one and a half times their regular rate for hours worked over 40 in a workweek. Federal law doesn't require overtime for working more than eight hours in a day, weekends or holidays, though some states do. See what is a non-exempt worker and overtime laws by state.
Unapproved Overtime Must Still Be Paid
This is the most important rule in any overtime policy. The Department of Labor explains that work not requested but "suffered or permitted" is work time that must be paid. Federal regulations go further: management can't "sit back and accept the benefits without compensating for them," and "the mere promulgation of a rule against such work is not enough." In other words, if you know or should know someone is working, you have to pay for it, even if your policy says overtime requires approval.
You Can Enforce Your Policy
Employers can require approval for overtime and can discipline employees who repeatedly break the policy, as long as they pay for all hours worked. California's Labor Commissioner, for example, explains that employers must pay for overtime even if it wasn't authorized, and can discipline employees who violate a policy against unauthorized overtime.
State Daily Overtime
Some states have daily overtime rules. In California, non-exempt employees generally earn time and a half for hours over 8 in a workday and over 40 in a workweek, and for the first 8 hours on the seventh consecutive day of work, and double time for hours over 12 in a workday and over 8 on the seventh consecutive day. Your policy should reflect the rules where your team works. See the California overtime law guide.
What to Include in Your Policy
| Section | What it covers |
|---|---|
| Who it applies to | Non-exempt (hourly and salaried non-exempt) employees |
| When approval is needed | Any time beyond scheduled hours, or beyond a set number of minutes |
| Who approves | The employee's manager, with a backup when they're out |
| How to request | In writing, through your time system, by text or by email |
| How far ahead | For example, before the end of the scheduled shift, or 24 hours ahead for planned overtime |
| Emergencies | What counts, and how to report overtime after the fact |
| Pay | A clear statement that all hours worked will be paid |
| Unapproved overtime | How it's handled, including coaching and discipline |
| Fairness | How overtime opportunities are offered |
| Records | How approvals are documented |
Free Overtime Approval Policy Template
[Company] Overtime Approval Policy
Purpose: To plan overtime fairly, control labor costs and make sure every hour worked is recorded and paid.
Who this applies to: All non-exempt employees.
What counts as overtime: Hours worked over 40 in a workweek[, and over 8 in a workday where state law requires]. Our workweek runs from [day/time] to [day/time].
Approval required: Employees must get approval from their manager before working beyond their scheduled hours [by more than X minutes].
How to request: [Submit a request in our time system / text your manager / email] before the end of your scheduled shift, or at least [24 hours] in advance for planned overtime. Include the reason and the estimated extra time.
Who approves: Your direct manager. If they're unavailable, [backup name/role].
Emergencies: If you must stay to handle a safety issue, customer emergency or other urgent situation and can't reach a manager, finish the urgent work, record your time accurately and tell your manager as soon as possible.
Pay: All hours you work will be paid, including any overtime that wasn't approved in advance. Never work off the clock.
Unapproved overtime: Working overtime without approval, other than in an emergency, is a policy violation. It will be paid, and repeated violations may lead to coaching and discipline under our standard process.
Fairness: When overtime is available, managers will offer it [by rotation / by seniority / to qualified volunteers first].
Questions: Contact [name/role].
Adapt the brackets to fit your business. Add the policy to your employee handbook, walk through it at a team meeting and ask employees to acknowledge it in writing.
A Simple Overtime Request Process
- Employee sees overtime coming and requests approval with a reason and estimated time.
- Manager decides: approve, deny, or offer an alternative such as moving work to tomorrow or adding help.
- Approval is recorded, with the date, hours and approver.
- Employee works and records actual time on the time clock.
- Manager reviews approved vs. actual overtime before payroll.
Overtime Request Form
Overtime Request
Employee: [name] | Date: [date]
Scheduled hours: [start] to [end]
Requested extra time: [hours]
Reason: [job, coverage, deadline]
Could this wait or be covered another way? [yes/no, explain]
Approved by: [name] | Approved hours: [ ] | Date/time: [ ]
Actual overtime worked: [hours]
Handling Unapproved Overtime
When someone works overtime without approval, handle it in this order:
- Pay it. Record the actual hours and pay them on the regular payday.
- Find out why. Was it an emergency, a misunderstanding or a pattern?
- Fix the cause. If shifts are too short for the work, the schedule is the problem. See scheduled vs. actual hours.
- Coach first. Remind the employee of the policy and how to request approval.
- Use discipline only for repeated violations, following your normal process and applying it consistently.
"I noticed you stayed about an hour late on Tuesday and Thursday. You'll be paid for all of it. Going forward, please check with me before staying past your shift, so I can plan coverage or move the work. What was happening those nights?"
What not to do: edit the time to remove the overtime, ask the employee to "flex" the time later in a different workweek, or tell them to work off the clock. Each of these can lead to unpaid-wage claims. Comp time in place of overtime pay is also generally not allowed for private-sector employers. See is comp time legal instead of overtime.
How to Reduce the Need for Overtime
- Schedule to demand, so busy days are staffed properly.
- Watch hours mid-week. If someone is at 34 hours by Thursday, plan Friday carefully.
- Cross-train so one absence doesn't pull everyone into overtime.
- Fix shifts that always run long, like closing shifts with tasks that can't start until close.
- Spread overtime fairly so it doesn't always fall on the same people.
- Use part-time or on-call help for regular peaks. See the on-call policy.
Distributing Overtime Fairly
| Method | How it works | Best for |
|---|---|---|
| Rotation | Overtime offered to the next person on a list | Teams where everyone does similar work |
| Seniority | Offered to the longest-serving qualified employee first | Union or long-tenured teams |
| Volunteers first | Offered to anyone who wants it, then assigned if needed | Teams where some want extra hours and some don't |
| Skills-based | Offered to people qualified for the specific task | Specialized work |
Whatever method you choose, write it down and apply it the same way every time. Unequal access to overtime is a common source of frustration on hourly teams.
Common Overtime Policy Mistakes
- Refusing to pay unapproved overtime. It must be paid.
- Shifting hours to another week to avoid overtime.
- Ignoring state daily overtime rules.
- No backup approver, so employees can't get approval when their manager is out.
- Inconsistent enforcement, where some people get away with it and others are disciplined.
- Approving overtime only after payroll, when nothing can be planned.
- Calculating overtime by pay period instead of workweek.
Worked Example: The Cost of Unplanned Overtime
A shop has six hourly employees who each earn $20 an hour. Without an approval process, each one averages three hours of unplanned overtime a week. At time and a half, that's $30 an hour, so:
| Item | Amount |
|---|---|
| Overtime hours per week (6 people × 3 hours) | 18 |
| Overtime pay per week (18 × $30) | $540 |
| Employer Social Security and Medicare (7.65%) | About $41 |
| Weekly total | About $581 |
| Yearly total (52 weeks) | About $30,200 |
If an approval policy and better scheduling cut unplanned overtime in half, the shop saves roughly $15,000 a year, without cutting anyone's regular hours. Run the same math with your own numbers using the time and a half calculator.
Overtime and Salaried Employees
An overtime approval policy usually applies to non-exempt employees, who must be paid overtime. Being paid a salary doesn't automatically make someone exempt. To be exempt from overtime under federal law, an employee generally has to meet a salary test and a duties test. Salaried non-exempt employees are still owed overtime for hours over 40 in a workweek, so include them in your policy. If you're not sure how someone is classified, review the Department of Labor's overtime guidance or ask an employment attorney.
Rolling Out Your Policy
- Share the written policy and explain why you're introducing it.
- Walk through real examples: a shift running late, a customer emergency, a planned weekend job.
- Make the request process easy, so following it takes less than a minute.
- Confirm that every hour worked will be paid, so no one feels pressure to hide time.
- Ask each employee to sign or acknowledge the policy.
- Review approved vs. actual overtime weekly for the first month and adjust.
Expect a learning curve. For the first few weeks, treat missed approvals as coaching moments rather than violations.
Questions Employees Often Ask
"What if my manager isn't answering?" Go to the backup approver named in the policy. If no one can be reached and the work is urgent, finish it, record your time accurately and tell your manager as soon as possible.
"Will I get in trouble for staying late to help a customer?" You'll always be paid for the time. In a real emergency, you won't be disciplined. For anything that can wait, ask first.
"Can I work through lunch to leave early instead?" That depends on your state's meal break rules and your company's policy. Ask your manager before changing your break.
Track Overtime Before It Happens With Updoot
Updoot's employee time clock records every punch to the minute, so you can see each person's hours as the week goes on, not just at payroll. The payroll report shows regular hours, overtime and PTO for every employee each pay period, and the KPI dashboard puts hours worked next to budget vs. actual, so you can spot overtime early and plan around it.
Sources
- U.S. DOL: Overtime Pay
- U.S. DOL: Fact Sheet #22, Hours Worked Under the FLSA
- eCFR: 29 CFR 785.13, Duty of Management
- California DIR: Overtime FAQ
- U.S. DOL: Fact Sheet #7, State and Local Governments Under the FLSA (comp time)