Compliance

Using software to simplify payroll and overtime

By Rick Bell

May. 14, 2020

Scheduling employees is difficult. Creating a schedule that factors in overtime can make the task even more time consuming.  

For companies that run in shifts or have round-the-clock operations, overtime is often a necessity. Poorly managed overtime can result in unnecessary cost overruns, cause mistakes on the production line and result in fatigue-related accidents.

Don’t work overtime to figure out your employees’ overtime. There are digital solutions that can simplify scheduling, address overtime requests and streamline the payroll process. Utilizing technology to develop a sensible overtime policy is essential to streamline payroll and will result in a safer, more productive workforce.

Why institute an overtime policy?

According to the Department of Labor, employees covered by the Fair Labor Standards Act must receive overtime pay for hours worked in excess of 40 in a workweek of at least one and one-half times their regular rates of pay. An effective overtime policy helps employers sort through daily and weekly overtime calculations to remain compliant with state and federal regulations.

Balancing Productivity

Scheduling overtime is often done to meet increased deadlines. Scheduling with a hair-on-fire approach — a practice followed by way too many employers — doesn’t necessarily equal optimal productivity.

Inefficient shift schedules lead to excessive and ineffective overtime levels. Many operations with fluctuating work demands have outdated scheduling systems that leave some employees idle and others too busy. Scheduling solutions can solve that headache.

Consider how many employees are needed to work overtime without affecting your team’s mental and physical health. Evenly rotating overtime schedules also can cut the animosity between employees and encourage a more supportive environment.

How technology helps

Technology plays a huge role today in helping organizations manage and reduce overtime expenses and meeting rigorous compliance standards. If you’re still using manual timesheets, it’s time to upgrade to an automated timekeeping system.

Automating overtime management provides streamlined processing, an impartial implementation of policies, fewer errors and more accurate record keeping. Time keeping and employee scheduling software significantly reduces the workload for supervisors while balancing employee requests and providing significant savings with the elimination of unneeded overtime.

Many organizations already have access to all the data they need to predict overtime costs in their payroll and time and attendance software. However, they don’t utilize it to its full effectiveness and wait until the end of a pay period to begin a deep-dive analysis into employee hours.

Instead, be proactive! Incorporate real-time analytics to track hours as the week unfolds to help identify employees who are on track to work overtime and allow for changes in staffing to minimize or eliminate these situations. Extract the data and examine it in a meaningful, practical way.

Perhaps most importantly, your compensation data can help avoid costly compliance violations, overtime lawsuits and steep fines.

Delicate balance between work and life

Resources are thin. Too much overtime — or not enough overtime — can cause stress, fatigue and burnout. Consider your employees’ health, your workplace culture and your business’ bottom line when scheduling overtime.

Workforce.com’s software simplifies operations and untangles complex overtime regulations. It also gives the entire organization the confidence that employees will be paid correctly.

Rick Bell is Workforce’s editorial director. For comments or questions email editors@workforce.com.

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