Overtime Pitfalls

For a company dealing with overtime, less is more. Allowing employees to work overtime can be beneficial when there is a deadline that needs to be met, but letting employees work overtime on a considerable basis can cost a company thousands of dollars. If a company does allow its employees to accrue overtime on a significant basis there are a few factors that should be addressed to make sure there are no liability issues. Companies should tell managers to monitor employee work hours closely, adopt management policies to help monitor these hours and always be on the lookout for employees who abuse their right to work overtime hours and intentionally submit fraudulent time cards.

Poor supervisory habits can lead to errors in employee time cards which can lead to disputes on whether overtime was worked or paid properly. Managers that issue key card or codes to employees to work on the weekend or allow them to take work home on a regular basis are not able to supervise them and hours worked could possibly be exaggerated. The unmanaged overtime costs could result in heavy fines.

Intentional fraud is also a concern for companies. There are a variety of ways for employees to steal overtime if management is loose or there are no set policies set in place to monitor overtime correctly. Ways this can be done is marking down un-worked overtime, punching in other employee’s timecards, or failing to punch out their own time card and when the manager comes to them about it tell them an inflated number of hours you worked and apologize for not punching out.

Overtime is a tricky thing for a company to deal with. The best way to handle it is only allow overtime hours in moderation and have managers check and double check all hours worked. Having pertinent policies set in place will allow your company to cut down on fraudulent overtime charges that can really hurt your business in the long run.

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