Time can be our friend, but it can also be our biggest enemy. Most employees have eight hours a day, but for some, there’s never enough time for all the tasks they need to complete. As a project manager, how many times have you extended a deadline for your team? Perhaps you moved a task to the following week once or twice (or many times) because there was simply not enough time for other things in your queue. However, in some cases, your only option is to let your employees work overtime to finish their time-sensitive tasks.
Most people hate staying in the office longer than they should. You probably don’t like how overtime work is costing your business too. We can all agree that it is something that you should avoid. Unfortunately, unexpected things happen. Several employees get sick, work piles up, or more clients come in than your team can handle. You still end up asking your workers to add in more hours.
When this happens, you’ll likely have several questions in mind. You’re probably wondering if all the extra hours you pay go to productive work. On the other hand, you might not be sure whether you’re paying your employees enough. You’re probably worried that they are looking at overtime abuse. Now, there might also be uncertainty as to whether you’re creating an accurate overtime log. Well, we’ve put together this article to clear all the confusion for you. We’ll also recommend an overtime tracker that will make payroll processing easier for your team.
What Can You Consider as Overtime Work?
In the U.S., the Fair Labor Standards Act (FLSA) details all the laws covering overtime work and compensation. If an employee is not exempt, they must receive overtime pay for work hours exceeding 40 in a workweek. According to the FLSA, a workweek consists of seven consecutive 24-hour periods, and they add up to a recurring period of 168 hours. The rate should not be less than time and one-half of their regular hourly rate.
If an employer fails or refuses to compensate eligible employees for overtime work, they will face costly lawsuits, fines, and even jail time. The penalty will depend on the offense’s severity and frequency. The penalties also vary depending on the state.
Who Will Receive Overtime Pay?
With the recently implemented overtime law, many workers who receive below $913 per week are eligible for extra pay. However, “white collar” employees who hold certain positions in a company are not covered by the overtime law. These include executive, administrative, outside sales, computer, and highly compensated employees.
How Do You Calculate Overtime Pay?
You’ll need to keep accurate records of your employees’ work hours to calculate overtime pay. Moreover, you need to track work hours according to the recurring workweek defined by the FLSA. You must know the employee’s regular hourly pay rate, then multiply it by 1.5x to pay for the logged time exceeding 40 hours. Here’s an example:
Joe logged in 50 hours this week, and his regular hourly rate is $8. For the time exceeding 40 hours, he will be paid 1.5 times the regular hourly rate. So, the computation should look like this:
Since he worked 10 overtime hours, his premium pay would be:
For that week, his total payment will be:
$320 (regular hours) +$120 (overtime pay) =$440
Easier Computation With a Free Overtime App
When you accurately track billable hours, you can easily comply with federal overtime regulations. A simple time tracking app like Traqq should spare you from all the legal worries about paying your employees correctly. To help you understand how this could happen, let us share how this overtime timesheet app works.
You can require your team to install Traqq on their work computers. Don’t worry because this app is downloadable for free. What’s more, it is easy to install, and it has an intuitive interface. So, there won’t be a learning curve for anyone using it. Once your employees have installed the app, the software will monitor their activity levels. It will log billable hours automatically and even track whether the user is putting in productive work.
At the end of the week, you can go to the dashboard and acquire a comprehensive report on logged hours. You can export all your employees’ timesheets to a CSV file for easier payroll processing. You will also see who worked more than 40 hours in the workweek. The best part is, all these timesheets are generated automatically. In just a few clicks, you’ll be able to create a comprehensive overtime report.
Compensating Your Employees Fairly
One of the challenges of compensating employees is ensuring that you accurately measure the amount of extra time they put in. It can be challenging to set overtime hours for everyone in your team. After all, most people want to pick up and leave the second they submit their work. So, your employees may have various time logs. Things get even more complicated if you manage a remote team with flexible hours.
Using a time tracking app like Traqq will efficiently resolve this problem. It does not matter who logged out early or late—the tool will still generate accurate reports on how long each employee worked. It will also show you how productive they were during all the hours they logged. This way, you can compensate each team member appropriately for the extra time they put in. Moreover, you won’t have to worry about underpaying anyone.
It’s worth noting that the European Union member states require companies to use a time tracker to log their employees’ work hours. This ensures that organizations compensate their workers fairly.
Ensuring the Logged Extra Hours Go to Productive Work
You already have a tool for tracking overtime work and a policy that will ensure you compensate your employees fairly. However, you need to consider that not everyone hates putting in extra hours. Some people are willing to give up their free time just to get additional money. They likely won’t mind working overtime and getting compensated at a higher rate. We try to avoid judging people. However, some employees may log extra hours if that enables them to do almost nothing during their regular work hours.
Of course, overpaying your staff can hurt your company’s productivity and finances. Fortunately, you can also avoid this issue when you use a free overtime tracker. Traqq, for instance, monitors the productivity of your employee. It will detect activity levels based on keyboard actions and mouse movements and clicks. Moreover, it will monitor the apps that your worker uses and the websites they visit. On the dashboard, you will also see how much time they spend on each activity. This way, you will know whether your employees have been putting in productive work or they’ve just been loafing around. Moreover, Traqq will show you if an employee’s productivity levels are high yet they still don’t have enough time to complete their tasks. This will prompt you to approve overtime work and compensation.
Now, what if a person logs extra hours and demands remuneration without putting in productive work? Remember what we told you about Traqq monitoring activity levels? Well, you will see the amount of time the employee actually worked and will be able to decide whether you’ll compensate them for the extra hours.
Compensate Justly, But Don’t Forget to Be Gracious
Don’t be the manager who nitpicks about every little detail on your employee’s timesheet. Let’s say you noticed inactive minutes on a worker’s time log or that they browsed a non-work-related site for a while. Remember that your employees are human too, and it can be difficult for them to stay focused at work for long periods of time. Taking breaks is vital since they help people regain their momentum and productivity. Instead of micromanaging your team, consider whether they are submitting valuable output.
Indeed, overtime compensation is a touchy matter, especially if you know nothing about tracking extra hours accurately. So, to make things easier, always use a trusty time tracker like Traqq. It will help you monitor overtime hours and even overall productivity and performance. With this free tool, you can ensure fair compensation for your employees.