Overtime sounds self-explanatory, right? It’s when you work… more than usual. But did you know there are many differences in types of overtime, and ways to compensate for overtime? When recording overtime, there are many things that you should know as an employer. So, let’s explore some interesting facts.
Working overtime is standard business all over the world. Some cultures and industries work more overtime than others. In Japan, for example, the average amount of overtime every month is just over 22 hours, but the pandemic alone made just business consultants increase their overtime by an average of 10hr per month in a single year. So, what you read here might have you thinking more about what you believe you know about overtime.
1. There are three main different types of overtime. Voluntary, compulsory, and nonguaranteed. What needs to be established first is the type of overtime your company offers. Voluntary overtime is work that an employee is free to accept or decline. Compulsory is mandatory overtime, as stated in your working agreement. Lastly, nonguaranteed is overtime that may or may not be offered. If it is made available, it is required work as stated in the employment contract terms. All overtime must be compensated fairly. A time and attendance tracking solution makes tracking these overtime hours easier to do. TimeMoto Cloud (Essential and Plus Plans) will record the overtime and even inform you if your employee is reaching overtime or exceeding the legally allowed amount.
2. There are two main different ways employees can be compensated for their time. Many businesses use time off in lieu (TOIL) and monetary pay-out. TOIL is when an employee takes paid days off to make up for their overtime (time-for-time, additional PTO), and a monetary pay-out is when an employee makes overtime pay for the work they did. Overtime and overtime pay-out can sometimes differ depending on the industry and different regional laws. For example, 8/80 is often common in nursing, allowing for 8-hour shifts over a two-week period that cannot exceed 80 hours worked. So, if on the first day of this two-week period, a nurse works for 10 hours, they get compensated for 2 hours of overtime since it is more than 8 hours.
3. You legally need to track exactly how much overtime an employee accumulates. In the United States and the EU, time tracking for every employee works is mandatory. In the US, employers don’t need to track when employees start and finish their shifts precisely but must keep accurate timekeeping on their overtime hours. Within the EU, it is the law to track exactly when employees start and stop their working time each shift. This guarantees that all other labor laws are being abided by. Individual European countries also have their rules. You can check out our laws and labor regulations page for more details about your region.
4. Overtime is compensated differently all around the world. For example, in the United States, overtime hours are compensated with “time and a half”, which is when employees are paid 1.5x their rate for all overtime hours. In the EU, the first two hours are compensated at 1.5x hourly rate, after that overtime is compensated at 200%. These types of compensation can also differ depending on the employee’s request or agreements with the employer.
5. TimeMoto keeps track of overtime for you. This will save you a lot of time and, potentially, legal problems. Overtime management is a feature in the Essential and Plus Plans of TimeMoto Cloud. You can always upgrade your plan if you are on a Free Plan and want to use this feature. With a click of a button, you can consult timesheets to keep track of the accumulated additional hours of each employee. It’s even possible to set notifications to alert you when somebody is working too much overtime. You can also consult pay and overtime reports to see the payments that your employees receive in a reported period. It is easy to define and use payout rules for worked hours, including overtime compensation.
Looking for a single, easy-to-use system that can handle all your timesheets, scheduling, and reporting needs in a fraction of the time? Discover all the features of our time & attendance management solution that our customers around the world love and use daily. Start with a free 30-day trial of our most extensive Plus Plan. After your trial, you can switch to our Free Plan or Essential Plan or just stick to Plus Plan. With TimeMoto, overtime management is easy and stress-free.
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