The economy is bouncing up and down and inflation is causing prices on just about everything to skyrocket. Small business owners need to do everything they can to avoid extra costs if they want to survive – and that may include finding ways to avoid overtime.
It’s important, however, to make sure that you are entirely above board with your methods. Otherwise, a wage and hour claim could end up costing you far more than just a few dollars. Here are some tips:
Identify patterns in overtime pay and eliminate what you can
If you start tracking the overtime, the results may reveal some serious gaps between the labor budget you plan for and the labor budget you actually have.
If, for example, your Friday night employees are always working over, that should tell you that you aren’t putting enough staff on the schedule for those shifts. Matching your staffing to demand is probably the number one thing you can do to eliminate unnecessary overtime.
Create a “no overtime except in emergencies” culture in your company
You have a great deal of power to set the tone for your business and the way that your managers and employees behave. If you make it clear that you want your employees to have a good work-life balance that can eliminate potential problems with burnout as well as excessive overtime.
Make it clear that overtime is never to be considered automatic. If someone thinks they need to work over, they need to get authorization from their direct supervisor, first.
Re-evaluate your team and see who is pulling all the weight
If only a few of your employees are picking up the majority of overtime hours this tells you one of two things:
- Those are the most dedicated employees you have and you need to see whose slack they’re picking up and replace those people.
- Those employees are unable to do their jobs during normal hours, and you either need to spread the work around more evenly or figure out the problem.
Sometimes an employee “milks” overtime pay by doing their work as slowly as possible, but it’s usually an issue of having more work than they can handle.
Avoiding wage and hour violations takes pre-planning. Seeking experienced legal guidance is wise.