Overtime authorization
policy for non-exempt employees saves money
Poor planning and abuse often result in unnecessary overtime.
While recent research shows employees may not have more incidents if they
work “moderate” overtime (48 – 59 hours per week), they
may become more fatigued and less productive. Moreover, overtime represents
a significant cost to many companies.
Employers should look at the Wage and Hour Module and be sure that employees
are properly classified as exempt versus non-exempt and be sure that proper
records are maintained so that overtime is clearly delineated from base
pay. A written policy governing overtime for non-exempt employees, including
an overtime authorization form should be distributed to employees and conspicuously
posted. It is incumbent on employers to watch out for employees trying to
enhance their pay with unnecessary overtime. Requiring a signed approval
from a supervisor or company officer will help curb the abuse of overtime
as well as identify clients and customers that continually make unrealistic
time demands.
Key elements to the policy should include:
1. All overtime must be approved in advance
by submitting an overtime authorization form. For a sample of this form,
contact us.
2. Statement regarding who is eligible for overtime
3. Explanation of how overtime is calculated
4. Statement regarding company’s understanding
of personal obligations and desire to provide advanced notice, when possible
5. Statement regarding consequences if employee refuses
to work overtime
6. Define compensation terms if your employees participate
in company- sponsored community-relation projects
7. Be sure that your policy is in compliance with all
state and federal laws as well as collective bargaining agreements
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