I have an hourly employee who I cannot get to stop working off the clock. It’s particularly an issue if he is out sick, but I regularly notice that he is working or has worked during off hours. I’ve asked him to only work while on the clock, but the problem persists. I think he’s trying to be helpful, but I’m worried about our liability on the matter and am unsure how to address it with my employee.

You’re very smart to be concerned: This is not a minor issue for a business. By law, you have to pay non-exempt employees for all hours worked, whether or not they had permission to do so. I realize this can seem a bit silly, but even if you specifically say, “John, you may not work when you are at home,” and John goes ahead and works, you still have to pay him. You can fire him, but not until you’ve paid him.

This problem can occur out of a misguided attempt to be a good employee. Maybe John really enjoys his job and wants to put in the extra hours. What if John really wants a promotion and thinks the best way to achieve this is to accomplish more than everyone else? He knows you don’t want him working off the clock so he simply doesn’t tell you, with the hope that you’ll think he’s amazing because he can accomplish so much in a single shift! Yay, John!

Except this practice still violates the law, and your business can get busted later. What happens when John gets fired and is now disgruntled — having put in a ton of extra unpaid hours for your business? He reports his unpaid work to the Department of Labor and has documents showing the hours he worked. Additionally, since some of his work involved sending emails, he can prove that you knew he was working off the clock. Yikes.

So that’s the legal situation. What can you do about it? The first question to consider: If he works from home when he is sick, reports the hours and is paid properly, is that acceptable to you? It might be and it might not be. Your solution might be to say, “John, when you are sick and feel capable enough to do a couple hours of work, that’s fine. Just make sure your time card reflects the actual hours worked and the sick hours taken. It’s very important to our company that you’re paid in accordance with the law, so let me know.”

But if John’s at-home work is lousy, or you want him to take a whole day to recover if he’s sick (not unreasonable), you need to explain this to him and implement a harsh consequence. You need to say, “John, when you are at home, whether you are sick or taking a personal day, you cannot work at all. You need to leave your laptop closed. You cannot make any phone calls or sketch out any ideas on paper. You can’t do any work. If I learn that you’ve been working from home, I’ll make sure you’re paid for your hours, but you’ll receive a formal warning. On the third event, you’ll be terminated. Is that clear?”

That may seem harsh, but you’ve got to protect your business. And this dilemma is only going to get worse if the Department of Labor gets its way and raises the minimum salary for an exempt employee to over $50,000 a year. That means lots of people used to being exempt and controlling their own schedules are suddenly going to be tied to a clock. Some will find this insulting and a demotion in practical terms. It stinks. Nevertheless, you have to follow the law and sometimes the law is unpleasant.

The other thing to do is sit down with John and evaluate his workload. Is he working off the clock because your demands are too high? It’s possible.

Be straightforward, implement a harsh punishment and follow through. Working off the clock puts your business at risk, and you have to take it seriously. Plus, taking time off when you’re sick is actually a good thing. It’s why we have Netflix. Buy John a subscription and he’ll never work from home again.