Overtime policy
Workforce Management Glossary
Overtime policy
What is an overtime policy?
An overtime policy will provide guidelines for both employers and employees. The overtime policy will effectively define the term overtime, when overtime is deemed reasonable, and the rules surrounding payment and at what rate.
Clearly defining these policies is important as employers can only legally ask employees to work outside of their normal number of ordinary working hours if that request can be deemed as reasonable.
For example, an overtime request is reasonable if there is a genuine need for the work to be carried out, prior notice is given, compensation is provided, and importantly, health and safety components are taken into account and risks are minimised.
Why does a business need an overtime policy?
Each organisation is bound by a different award and agreement. With an overtime policy, businesses can make sure that they are operating in accordance with their award or agreement.
An overtime policy also helps to outline expectations. For example, rather than being paid at an unknown rate, the policy will clearly outline the overtime rate, helping employees understand what to expect in their next payroll period.
How can a business effectively capture overtime in payroll?
Employers may need to ask their employees to work overtime for a variety of different reasonable reasons. With an overtime policy, no matter the reasoning behind the overtime request, the process can be streamlined.
To carry this efficiency into every aspect of overtime, especially where payroll is concerned, Roubler’s payroll software can be extremely helpful. Built to feature compliance checks and measures and with modern award interpretation included, fast and accurate payroll is facilitated whether some employees have worked overtime or actioned PTO.