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Overtime Management

Kolay İK
Overtime Management

A busy agenda generally indicates that your business is doing well; customers are pleased with your service. On the downside, it usually comes with a workload that may mean there are lots of tasks to complete in a limited time. In the end,  we find ourselves working overtime to meet all the deadlines. Some companies require overtime work frequently, but for some, it’s a rare occasion. This depends on their needs.

Overtime management is one of the tasks where HR specialists need to negotiate different parameters such as labor laws, company overtime policy, budget arrangements, employee needs. In this article, we will examine the dynamics of overtime management and discuss strategies to make it more efficient.

Overtime Work and Legal Requirements

Overtime work is defined as the time worked in addition to the regular working hours specified by the labor laws of both the country and the company contract. Normal working hours and the compensation of overtime vary from country to country. Employers may choose to pay overtime, adding an increased rate to the regular pay, or they may choose to give time off in lieu (TOIL): extra time off in exchange for overworked hours. In some cases, they may not compensate for it at all, depending on the contract and labor laws.

HR specialists must know about labor laws to make sure that overtime processes are in line with requirements. When they don’t comply with legal requirements, an employee may rightfully file a complaint about their uncompensated overtime. Mismanaged overtime processes don’t just result in paying fines, but also in a bad company reputation.

The contract between the employer and employee must specify overtime procedures clearly. An employee usually doesn’t have to agree to accept overtime requests, unless the contract says so. In some countries and companies, employees must accept a written request from their employers for overtime. It is essential to be on the same page with employees. This can be achieved by informing them about overtime structure and how it is compensated.

CountryMaximum normal working hours a weekCompensation
UK48 hoursIt depends on the company contract. Employers don’t have to pay for overtime, but the average pay shouldn’t fall below National Minimum Wage. 
France35 hoursCompensatory pay is 25% more than the regular hourly rate. After 43 hours, it becomes 50% more.
Italy40 hoursOvertime must be paid with a minimum increase of 10 cents compared to regular pay. The rate of increase is dependent on the company and collective bargainings.
Greece45-48 hoursCompensatory pay is 40% more than regular pay per hour for up to 120 hours a year. For more than 120 hours, it increases to 60%.
Germany48 hoursCompensation is specified in the company contract. 

Overtime Violations

HR professionals must ensure that all the paperwork regarding employees is correct and the company is acting within the law. The frame of overtime is shaped by labor laws and company policies. However, sometimes employers violate overtime regulations, usually due to negligence or ignorance.

“Off-the-clock” work is one of the common violations, where employees work outside of working hours on simple tasks that “aren’t worth paying”. Some employers don’t want to compensate for the time spent preparing for work and wrapping up at the end of the day. Some employers may not see completing quick, simple tasks like answering calls and emails after work as overtime, but they do count since the employee is still working for the company, even if it doesn’t take too much time. 

Other types of overtime violations include misclassifying employees, failing to pay compensation, and miscalculating overtime amounts and pay rates. Even if these mistakes are made involuntarily, the company can face legal penalties because of mismanaged overtime processes.

Overtime and Company Budget

One of the highest costs of a company is labor expenses, including salaries, insurance, and side benefits. Adding overtime payments increases these expenses which can be problematic, especially for small businesses. If the employees in an organization work overtime frequently, the company should be reviewing the workflow to keep it under control. For example, they could use technology to improve workflow and save employees from unnecessary effort. If there is still a need for frequent overtime, the company must check the human resources they have and recruit new employees as necessary.

Overtime and Employee Productivity

Expecting a creative outcome from an exhausted employee is unrealistic; exhaustion is an enemy to our mental functions. Repetitive overtime patterns may mentally and physically harm employees. It can cause resentment and frustration, thus impairing employee relationships with the company. Even if the employee is eager to work overtime, HR professionals should make sure that they are not worn out by long hours.

How to Manage Overtime Effectively

Comply with legal requirements

HR professionals need to fully understand labor laws around overtime so they can spot any overtime violation in their organizations. The details of overtime must be fully clarified in the contract and employees should be aware of how overtime works and how it is compensated. 

Review the efficiency of project management

The typical duration of a workday, eight hours, is not a short time. There can be exceptional days or weeks where everyone needs to work more to meet tight deadlines. However, you must review how projects are managed if overtime becomes a regular habit.
And in the article “What is a shift?”, you can read about how the working hours management processes work and why they pose a challenge for organizations that need to manage their employees who are working overtime. 

Measure productivity by output, not by time 

Long working hours don’t necessarily mean a better rate or quality of production. Working efficiently is more important for achieving company goals in the modern world. If there is a problem in terms of the time required to produce an output, the workflow must be reviewed, employees must be trained as appropriate, and technology must be used to decrease the workload.

Use overtime management software to avoid mistakes

It is best to automate this process to avoid mistakes, and so you can review your employee data in a couple of clicks when necessary. Overtime management systems provide an effective way to manage overtime. With Kolay’s HR management software, you can create overtime requests, review all your employees’ overtime balances easily, manage overtime pay and TOIL processes, generate overtime reports quickly, and communicate with other departments. Try Kolay now for free, and see the impact it has in your workplace.

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