I'll say this again for the managers out there who read the Capitalist... You have to pay OT to hourly employees; it's never optional because of a policy or procedure violation...
If an employee is classified as non-exempt or hourly, you have to pay overtime for all hours worked past the normal 40 hour work week. You can't withhold overtime because they didn't get it pre-approved. Withhold overtime, even if it wasn't approved, and you're running the risk of legal action and you'll end up paying it anyway.
Seriously - the law doesn't care if you didn't approve it - you have to pay it...
Here's how the scenario usually works at most companies:
1. Non-exempt or hourly employee in question reports hours worked and includes overtime. Supervisor/manager in question has limited desire/time to micro-manage hours reported, so lots of overtime gets paid over a multiple month period.
2. Finance/Accounting runs reports, correctly communicates the overtime situation. As a result, the edict goes out top-down that all overtime must be pre-approved moving forward.
3. Managers do a "mixed" job of communicating pre-approval process to hourly employees in question.
4. Employee who is used to working a lot of overtime continues to work the overtime, sometimes without approval. Reasons for not gaining approval can range from "the customer demanded it" to "my supervisor's never around"...
5. Since the need for pre-approval was communicated to employees, the first reaction of the manager in question is to not pay the overtime.
That's the natural reaction to that course of events. But it's wrong. The law doesn't care if you had pre-approval in place and the employee didn't follow it. It just calls for all hours past 40 to be paid to hourly employees (note - I'm not digging in here on deep FLSA regs, and whether you can spread the hour count over a bi-weekly pay period, etc. - I'm just working the pre-approval objection I hear most).
So, what do you do? Your only option is the following:
1. Pay the OT...
2. Pay the OT...
3. Use your corrective action/progressive discipline policy to document the policy violation, and hopefully send a message to the employee that pre-approval for OT is required and not optional.
4. Repeat as necessary.
That's it. Pay the OT, document any policy violation to send the message and move on. The employee either gets the message or they ultimately move out of the company.