When the employees work above the scheduled working hours allotted to them and get minimum wages, it becomes essential to pay them for the overtime work done as per the pro-rate basis. The configuration and designing of attributes like how much amount to be paid, how much maximum overtime hours to be counted, compensation against worked overtime, etc. build up the overtime policy. This policy is designed to ensure that employees benefit from working overtime as per the government declared laws. This law also states punishment to be charged against employers not adhering to the law. Our overtime policy template will provide sample policy and insights about what key components to be kept in mind when designing the policy.
“Name of the Company’s” Overtime Policy aims at reducing labor expenses for employees who spend extra hours to meet deadlines by offering them respective monetary benefits. In necessity, employees are required to work more time to ensure that the essential projects are finished on time.
As a business, we commit to compensating extra efforts and time given by our subordinates with fair pay rates.
This policy is required to gather details of remuneration for more time put into work. This ensures that an employee is regularly and correctly paid for their excess time.
It helps to tackle misuse of working extra, decreased productivity, and ill employee health.
It is designed considering critical factors such as days and departments to be excluded from the benefits.
For example, holidays or sick leave are not considered official hours. Employees and consultants on probation are not eligible and hence can be excluded from these benefits.
This policy is usually applied to all the confirmed employees of the organization.
Overtime remuneration is met if an employee works higher than the hours prescribed by company norms. i.e., hours spent beyond the workweek.
An employee is expected to receive permission from a supervisor to be eligible for payment.
Overtime can not be compensated as extra hours are put in without prior agreement. Factors such as coming early, staying late, or working during breaks are not deemed as working extra.
Employees must take their supervisors’ approval before applying for overtime. However, it is only allowed when an employee is uncertain about completing their allotted tasks.
Often an organization may require their employees to work extra due to peak hours. Working extra hours is seen as a requirement when the need arises. Declining the proposal after the fair notice can trigger disciplinary actions such as termination or elongation of probation.
A few limitations to consider while considering extra working are:
After-hours working is not a promotable option. Safety measures around the use of overtime are necessary as no organization would like loss of morale and productivity or other overwork accidents.
Employees found violating overtime guidelines such as unapproved hours or slacking productivity during standard company hours purposefully to avail benefits can face the consequences. It can be prolonged probation or even termination, whichever suits the offense.
Both employer and employee must save accurate records to ensure overtime pay. In addition, there are specific protocols to follow for a smooth process, such as:
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