President Barack Obama recently directed the U.S. Department of Labor to look at the nation's existing overtime rules to determine whether they can be expanded to help workers, USA Today reported. For employers, this means the potential of stricter employment legislation that they will need to comply with. HR software, specifically payroll processing software, is already an essential aspect of managing workers' pay and benefits, as well as ensuring compliance with employment legislation.
Yet reducing overtime will be an important payroll management strategy for employers both large and small. To limit the amount of overtime workers accumulate, employers need to follow certain workforce management techniques and put into place policies encouraging staff members not to work past their shifts or when they are otherwise not supposed to work.
Determine worker classifications
How employees are classified is already important to payroll, but Human Resource Executive (HRE) Online noted it will become even more essential under altered overtime rules. Salaried workers often don't qualify for overtime pay, but this may change, especially if the president chooses to follow California. According to HRE Online, the state recently altered its law so workers making less than $800 aren't exempt from overtime by 2016, which some salaried employees fall under.
HRE Online noted many employees are misclassified by their employers to prevent having to pay them overtime, yet with the media surrounding the new regulations, many employees may question their own classification and go right to the Labor Department with their grievances. The first step to preventing too much overtime use is to classify workers correctly the first time. This prevents legal issues and also encourages the company to pay closer attention to who is accumulating overtime.
Develop expectations for overtime
Workers need to know exactly how many hours they are allowed to work every week if they are allowed overtime under federal regulations. Employers shouldn't be shy with offering employees this information. When staff members know they can't skip their lunch every day because that extra 30 minutes on the clock each day adds up to overtime, they may be more mindful of their own actions. According to Purdue University, communication about overtime is important to prevent any misunderstandings.
Decide and enforce penalties for noncompliance with rules
Employers should create policies about overtime that are in compliance with employment legislation, and they also need to ensure any and all penalties or disciplinary measures are in compliance as well. If workers don't follow the established rules on a regular basis, employers need to ensure they enforce the rules. This is important to ensuring workers aren't frequently accumulating overtime if it is unnecessary.