Develop a professional and proper overtime policy to duly compensate your hard-working employees.
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.
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:
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.
Define the basic concepts concerning this policy and explain what those concepts mean to your organization.
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
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.
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:
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