Employers spend countless hours worrying about, and in some cases, trying to ignore, overtime hours worked by their employees. Don't hide from the overtime issue; instead, take charge of it through effective planning and management.
1) Know the law! It's surprising how many employers do not. In the state of California, generally, employees who work more than 8 hours in a day or more than 40 hours in a week are entitled to be paid overtime. Employees working more than 12 hours in a day, or more than 8 hours on their seventh consecutive day worked, are entitled to double-time pay.
2) Don't Fear Overtime. Some employers demonize overtime, creating an atmosphere in which it is strictly not allowed. In reality, overtime work may occasionally be needed. Allowing a staff member to work overtime, and paying him/her properly for it, can be the most cost-efficient means of getting the work done sometimes. Don't make your employees afraid to report that they've worked overtime. Workers may not write it down on their timecard out of fear of discipline, then later file a wage claim for those unpaid hours.
3) Make your policy known. Employers should include an overtime work policy in their employee handbook. Most companies require employees to advise their supervisor in advance of the need to work overtime to seek his/her approval. Be sure to also require employees to document all hours worked on a regular basis.
4) Document it. Be sure that you can prove that overtime hours were properly tracked, calculated and paid. This is your best defense against future unpaid wage claims. Ensure that your timekeeping system provides a method to track overtime, and that your employees certify every pay period that they recorded all time worked. Don't ignore the issue - if you are aware that overtime is being worked but not tracked and paid, pull your head out of the sand and make sure your staff starts recording it. Then see #5.
5) Manage it. If you have workers who accidentally slip into overtime work, or even intentionally do so on a regular basis, remember that you still must pay for the hours already worked at the overtime rate. This is a performance problem. Your recourse is to then manage their performance. Counsel offenders verbally and in writing as to their violation of your policy. At the same time, evaluate the reasons that overtime work is being used. Do you need to adjust shifts? Hire additional staff? Better train existing staff to improve performance and efficiency?
Protect your bottom line from expensive, unplanned overtime and your business from costly claims of unpaid wages by ensuring overtime is properly and proactively managed. Then get a good night's sleep.
Laws pertaining to these issues can be complex and confusing. Employers should seek counsel regarding the extent of their obligations under the law. Contact Freeland Law APC for a free 30-minute consultation with Michael Freeland, experienced employment lawyer serving San Diego, La Mesa and El Cajon, California. Michael Freeland has been practicing law for more than 27 years and specializes in employment law matters.
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