Must-have company overtime policy template

Every company is subjected to have overtime. Therefore, an overtime policy is crucial to regulate this part of the business (compensation, procedures, and approval process), protect employees from excessive overtime, and keep a cap on overtime pay expenditure. Download now (for free) our Overtime policy template which will save you the trouble of creating one from scratch.

Overview

Employers have overtime policies in place to successfully manage employees who want to work beyond their scheduled hours. This policy is especially important to prevent their employees from working long abnormal hours at the detriment of their health and productivity.

A well-written overtime policy communicates the eligibility status of the employees to them. Issues such as compensation, procedures, and approval process are also addressed in the policy. All of these will help a company better manage their employees and keep a cap on their overtime pay expenditure.

The overtime policy template is an all-encompassing document that outlines the company’s overtime payment structure and other modes of compensation employees will benefit from when they work extra hours. It also indicates the procedures employees need to follow to work overtime and exempted employees. This policy is in the collection of Grove HR's organizational policy kit for better people management at work.

The overtime policy template

Policy brief and purpose

Use this section to explain to your employees why your company has this policy. Let your employees know all it encompasses.

For example: This policy serves as a guideline on the administration of working overtime in accordance with company regulation and the current {national} Labour Law. With this policy, the (company’s name) management want to:

Make sure employees know what qualifies them for overtime work and otherwise
Prevent the loss of productivity, and health risks due to overtime work

Scope

This section should explain who the policy is applicable to and who is responsible for compliance.

For example: This policy applies to all our employees. Managers, HR, and respective functions have the responsibility to ensure this policy is complied with.

Definition

Define the basic concepts concerning this policy and explain what those concepts mean to your organization.

Overtime

Use this section to specify how many hours your employees are to work before they are eligible for overtime.

Overtime refers to when an employee works beyond what is their standard daily or weekly schedule.

Here are examples of countries and their overtime work regulations:

Malaysia - The Employment Act stipulates that the maximum hours an employee may be compelled to work before applying overtime is 8 hours/day or 48 hours/week.
Singapore - The Singapore labor laws consider any work beyond 8-9 hours/day or 44 hours/week overtime.
Vietnam - Under the Labor Code, the number of hours employees can work before being eligible for overtime is 48 hours/week

Overtime pay

This section should explain your organization’s overtime pay structure and specify if the same pay rate applies on weekends and official holidays.

Overtime pay is the monetary or paid time off compensation employees working overtime receive for putting in more hours than the required schedule.

Here are examples of countries and their overtime compensation regulations:

Malaysia - The Employment Act requires that employees be compensated for overtime at 1.5x of their regular wage per hour. On an official holiday, it increases to 3x of their regular wage.
Singapore - The overtime pay rate in Singapore is set at 1.5x of an employee’s standard pay per hour.
Vietnam - The Vietnam Labor Law set the rate of overtime pay at 1.5x of their average wage per hour. This changes to 2x and 3x of their pay on weekends and official holidays respectively.

Eligibility

Who is eligible for overtime work? What are the exemptions?

For example: All non-exempt employees are eligible for overtime work. However, due to labor laws, some employees may be exempted from working overtime. These employees may include:

Sick employees
Elderly
Pregnant employees

Download for free the full Overtime policy template 👉

With this template, you can:

Define clearly the concept of working overtime that is applicable to your business.
Determine who is eligible for overtime work.
Perfectly craft the rules binding employees and managers regarding overtime, and the procedure when applying for overtime work.

How to use this template

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The template is fair use for your own purposes. Feel free to copy or refer to the structure and guidelines inside.
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Keep in mind that this template is not a legal document and may not take into account all relevant local or national laws.
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The contents in the template are just a starter. Make sure you insert and edit the variables (name, logos, etc.) to tailor the template to your business.
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Upgrade the material by changing or adding in texts, sections, and visuals.
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Export as PDF or print it out for easier handling and communication with your team.

Who this template is for

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Companies that want to regulate employees' overtime.
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Managers who want to duly compensate employees working overtime.
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HR Managers who want to craft or revamp their company overtime policy.