Effectively managing employee overtime

Managing an employee's overtime hours and pay can be one of the trickier tasks for a business owner. Not only does it demand clear and correct handling of compensation, but overtime falls under legal mandates that require proper adherence by employers and staff.

Establishing the legal ground rules for overtime should be part of the initial orientation for new employees. Staff members should be aware of entitled compensation, rules and limits to working overtime.

According to Kathy Peters from the department of employee relations at Purdue University, employers often dictate that overtime is not a company practice when expectations exist for longer hours. Such a practice is illegal and can strain relationships between co-workers and increase workplace negativity.

The Fair Labor Standards Act under the U.S. Department of Labor Employment does not put a cap on overtime hours for workers aged 16 years or older. However, employees must receive permission to work overtime to ensure proper employee tracking, time and attendance.

"Overtime is more than an issue of compensation. Effective employee relations strategies can alleviate common confusion and dilemmas surrounding overtime," Peters wrote in the Purdue study.

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