Employees usually work overtime because they want to earn extra money, or they want to look good in simple order to get a desired business promotion. As a business owner, however, you have to make it clear if your company allows overtime or not, and what rules govern the practice of rendering overtime. For this reason, you need to learn how to create a company policy regarding overtime.
Doing this will ensure that your employees do not abuse the overtime system as well as ensure that they understand when they may perform overtime duty. Here are the steps that should help you make your own overtime business policy. We have also provided some samples to serve as guides while you come up with your company’s own policies regarding overtime.
Some employees, by virtue of their compensation plan packages, are deemed ineligible for receiving overtime pay. All you have to remember is that non-exempt employees are allowed to be paid for overtime while those who are exempt cannot be paid for any overtime for employee work. Here are some examples of employees who are typically not paid for overtime work:
As stated before, there are some employees who are willing to abuse the overtime system so they can earn extra money without putting in the required amount of work schedule. So, to prevent this from happening, you can have general managers approve the requests of employees to work overtime. Make sure that the limitations and rules set in place are enforced fairly.
This is something that you definitely need to do. Go through the current business policy on the amount of overtime that employees are allowed to render, how much you should pay them, and how to calculate the pay based on the employee’s contract and duties performed. These laws can vary from country to country and state to state, so make sure that you read up on them.
Make sure that everything about the sample policy is easy to understand. Keep the policy short but simple enough that all of your employees know when they can apply for overtime and how they can do so. Try not to make more than two exceptions to the rules, and make sure that employees receive a copy of the policy. Once the entire policy has been established, you can place this in the employee handbook and update it regularly or as needed.
If you would like to learn more about overtime policies or anything else related to the topic (such as how to make use of overtime sheets), then all you have to do is go through our other articles. Have fun reading!