Overtime policies can be really overwhelming. What is the standard pay rate? Are your employees eligible? Read on to learn about the best overtime practices.
Office workers worldwide tend to work a lot. Without exaggeration that means extra-long hours. Time at work, for no doubt, is money. Every hour tracked as overtime in the U.S. is 1,5 to 2 times more money. Though competition at the labor market sets its rules – new labor ethics is widely accepted and 60 to 80- hour workweeks have become a norm. Most of us volunteer to shorten vacation or even take less sick leaves to work longer and harder. Fantastic for business and economic growth, enough money earned to foot your bills and make savings. But does overtime really pay back?
The financial miracle of Japan illustrates an extreme scenario, when workers literally die at their desks. There is an unofficial term “karoshi” which means death from overwork. A Japanese office can really kill – a number of fatalities over years makes shocking statistics. A perfectly healthy young journalist, aged 31, passed after clocking 159 hours overtime in one month…
If stretched office hours are so dangerous and potentially lethal, what can we do to reduce overtime?
Working overtime is not normal. Productivity plunges during extra hours. Consequently, a number of mistakes grows. Perpetual overtime really indicates bad management- poor workflow and unrealistic estimation. Some managers abuse overtime and turn it to a mandatory thing for workers to make up for their lack of planning and PM experience.
Situations like this one are quite common in the world of IT and software development, as developers are generally used to working long hours. Unfortunately, many reports are devastating, as employers treat their staff unfairly and don’t pay for overtime. Stack Exchange has a lot of discussions about developers working twice more time they are paid for without getting compensated or receiving other incentives for that. Why they do it? Out of love for their work or out of the risk of losing the job.
Unpaid overtime is illegal
First, all overtime should be agreed with both sides (employer/employee). It is illegal to force someone to work extra hours without pay. Slavery should be laid to rest. If a manager is telling you to stay longer than stated in your contract and doesn’t want to discuss the conditions, – you are free to leave. Sue the company if they threaten to fire you. Otherwise you’ll be contributing to the monstrous practice of labor exploitation. Isn’t it what people fought against in the Civil War and Labor Movement the 1860s? We should learn the lessons from the past.
Since the past decade labor and wage disputes have sky-rocketed: “In 2014 alone, the Department of Labor ordered businesses across the country to pay almost $241 million in back wages because of employee misclassification (in an attempt to avoid overtime pay), asking or encouraging employees to work more than 40 hours per week without pay, or encouraging employees to be responsive to email, texts and phone calls off-hours–without pay”.
Stop overtime volunteering
Second, we have to work out effective mechanisms to demotivate employees to take initiatives to work more. Again, it may be an objective circumstance or an emergency, when overtime is justified. That is exactly that it’s meant for, as governed by the federal law. Average overtime hours reported since the beginning of 2018, according to the Bureau of Labor Statistics, vary between 4 to 4,9 hours a week in manufacturing and goods only. In professional services the hours tracked were around 35 a week on average. So, why do we discuss disastrous overtime if it officially doesn’t exist? Unfortunately, voluntary overtime is out of formal timesheets.
A simple way to prevent self-inflicted overtime is to increase pay for standard office hours. Productivity levels differ depending on the job. In development, for example, it isn’t possible to work 60 hours a week on a regular basis and show great results. Continuous overtime is harmful for everyone. It cannot be a regular practice. Give people what they want and they will complete their tasks in time. Again, invest more in estimation. Let developers say how much time they will need for a task, what is achievable and what’s not. Consider estimating units of work, when it is hard to estimate time. Another option for software companies is to implement hard blocks using a Revision Control System or workstation blocks by hours (up to 8 hrs/day).
A universal solution may be a penalty for unjustified extra hours. Top managers and business owners should carefully monitor the time tracked within the company. A great solution is to apply a mobile or a desktop time tracking software. That makes it easy to track hours spent on clients, projects and specific tasks. When managers see the big picture, they are informed about all overtime cases, it provides ground for finding the reasons behind overtime. Why do employees constantly track overtime? Penalties may work if overtime is tracked without a good reason. What if the problems go deeper that prosaic money making?
In most cases, overtime is a vital necessity that covers up for internal problems within the company. Thus a time tracking software will be instrumental in improving things on a greater scale. It is essential to understand where the problems stem from, be it personnel shortage, lack of professional skills at the individual level or inadequate reward policy – there is always room for improvement.
A common saying goes “work hard – rest hard”. Overtime is hard work and should be compensated accordingly. Don’t get addicted to that. Remember what happened to the cat that had too much cream? There are ways to reduce overtime if you are aware of the true factors that provoke it.