Managing Off-the-Clock Work in Nonprofit organizations can be a challenge, as many nonprofits often rely on dedicated employees who willingly go the extra mile for the mission. That commitment is one of the sector’s greatest strengths, and it can also create wage and hour challenges when employees perform work outside of their recorded hours.
Here we are talking about the ever diligent nonexempt employee. A quick email before the workday begins, setting up for an event, responding to donor questions after hours, preparing for a meeting, or completing paperwork at home can all become compensable work time. Under the Fair Labor Standards Act (FLSA), whether an organization intended for that work to happen is not always the deciding factor. Often, the key question is much simpler: Did the organization know, or have reason to know, that the work was being performed?
Two recent federal court decisions illustrate how differently these situations can unfold.
In one case, an employee worked independently, established his own schedule, and never informed his employer that he was working significant overtime. Because the employer had little opportunity to observe or track those additional hours, the court found that it did not have actual or constructive knowledge of the overtime and was not responsible for paying the claim.
In another case, employees routinely arrived early to prepare for their shifts before officially clocking in. Supervisors observed the practice, the work occurred regularly, and the organization’s timekeeping process effectively erased those minutes from employees’ recorded time. The court determined that the employer knew, or reasonably could have known, that employees were performing unpaid work and held the organization responsible for the overtime.
The contrast between these cases offers an important reminder for nonprofit employers. Policies alone do not eliminate liability. If managers regularly observe nonexempt employees working before or after their scheduled hours, isn’t tracked on recorded on their timesheet and no action is taken, the organization is very likely to be responsible for paying that time.
Reducing the Risk
Creating a culture of consistent and accurate timekeeping protects both employees and the organization. Consider these best practices for your nonexempt employees:
- Maintain a clear timekeeping policy requiring employees to record every minute worked, regardless of when or where the work occurs.
- Explain that overtime requires advance approval while recognizing that all hours worked must still be reported and compensated when legally required.
- Ask employees to verify that their recorded time accurately reflects all hours worked each pay period.
- Train supervisors to recognize off-the-clock work, including work performed remotely, before shifts, after hours, or during meal periods.
- Address unauthorized overtime through coaching or corrective action rather than by withholding pay.
- Periodically review timekeeping practices to identify patterns that may indicate employees are routinely working unrecorded hours.
HR Takeaway
Mission-driven employees often want to help wherever they can, however, good intentions do not eliminate wage and hour obligations. Accurate timekeeping, attentive supervisors, and consistent payroll practices remain among the best safeguards against costly overtime claims. A proactive approach not only reduces legal risk, it also reinforces fairness, transparency, and trust throughout the organization.
If you have any questions regarding wage & hour or other HR questions or concerns, please contact us at HRServices@501c.com or (800) 358-2163.
About Us
For more than 40 years, 501(c) Services has been a leader in offering solutions for unemployment costs, claims management, and HR support to nonprofit organizations. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy and are committed to providing our clients with customized plans that fit their needs.
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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.
(Images by Armmypicca and Mindandi)
