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    Employee Overtime: A Guide for Employers


    Overtime can have wonderful effects on production, but sometimes the cost of paying employees may outweigh production’s success. 
    Is overtime beneficial? As an employer, what do you need to know about overtime? 
    If you are currently offering overtime or even contemplating it, there are several factors that should be considered. Each can affect output, employee happiness, and business success. 
    Considerations about Employee Overtime
    Half of America’s employees work 50 hours a week, leading to feelings of exhaustion and anxiety. So when extra hours are put on the table, employers must consider their moves carefully. 
    Do You Really Need It? 
    Honestly. Do you? 
    Look at your yearly charts, estimates, and figures. How often has the company been requiring overtime? Certainly, every business has peak seasons, but if you find your corporation has been mandating or even requesting overtime hours regularly, it may be time to hire new employees. 
    To aid your decision further, locate the company’s yearly gross revenue and divide it by the total amount spent on payroll. This will give you your payroll percentage
    The expected percentage varies by industry, but the safe zone is between 15 and 30%. If your percentage falls on the lower end of the spectrum, consider hiring employees. 
    Impacts on Productivity 
    The National Safety Council and the Brigham Health Sleep Matters Initiative found that US employers with 1,000 workers will lose over one million dollars each year. 
    Why? Because employees are exhausted. This number factors in absenteeism, healthcare costs, and reduced productivity—all characteristics of fatigued workers. 
    Therefore, it is important to reflect upon your average workers’ emotional and physical well-being. If you suspect overtime will tarnish a positive, productive environment, ask employees directly for their opinions or consider adding incentives for overtime.
    If the work environment is healthy, however, overtime may be an excellent way to help rather than hurt your employees. 
    Pay Requirements
    According to Marc Anidjar, an overtime lawyer in Fort Lauderdale, “Employees who work above 40 hours must be paid time-and-a-half.”
    As such, you may find it helpful to anticipate extra costs the business will incur with overtime. To calculate this, find the overtime rate by halving your employees’ hourly pay, then add them together. For instance, if the hourly pay is usually $9.50, you must add $4.75 for overtime. This results in a pay of $14.25 an hour for overtime work. 
    Next, multiply the hourly overtime rate with the expected hours of weekly overtime. This will show how much an individual employee will receive for the week’s overtime. Finally, take this number and multiply it by the number of employees who will work extra hours.
    You now have a number demonstrating the business’s expected weekly cost for overtime. 
    This and revenue productivity may help you weigh the company finances to determine if extra labor is necessary and beneficial. 
    Tough Decisions
    Sometimes overtime is a no-brainer. Other times, it may require a bit more consideration. For those periods, take the above into account before making any hasty decisions.

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