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The rules of overtime

Do you find yourself asking staff to work overtime when business is booming?

Many business owners typically know when their busiest times are and will have formed strategies to cope through those peak periods.

For a fluctuating small business it might not make sense to hire more staff, and so requesting overtime from existing staff is a common solution.

As the name suggests, overtime falls outside of an employee’s ordinary hours of work, and there are rules when it comes to requesting overtime from them. It’s important that you are aware of the rules on overtime to avoid people problems in your business.

Whilst overtime can be seen as a quick solution for a busy business, it can also have a negative impact if not implemented well. We take a look at this below in addition to the rules of overtime.

My legal obligations as an employer regarding overtime

The Fair Work Ombudsman (FWO) specifies that employers can request that an employee works reasonable overtime. You may ask, what might be deemed as reasonable? Well the FWO have made this clear and the following points must be considered when requesting overtime from employees.

  • Risk to health and safety from working the extra hours
  • The employee’s personal situation, including their family responsibilities
  • The needs of the workplace
  • Overtime payments or penalty rates for working the extra hours (if applicable)
  • If they are paid at a higher rate on the understanding that they work some overtime
  • If the employee was given enough notice that they may have to work overtime
  • If the employee has already stated they can’t ever work overtime
  • The usual patterns of work in the industry

You’ll also need to consider overtime rates. These are set out by awards, enterprise agreements or other registered agreements and can differ between industries.

For example, a recent Fair Work Commission ruling on overtime for casuals on horticultural farms came into play this month. Penalties can be incurred for non-compliance regarding the change to maximum shift hours. Ask us if you are unsure about overtime awards for your industry.

The impact of overtime on your business

Whilst the request may be reasonable and the employee may be willing to accept overtime, you’ll want to monitor the frequency of which overtime is occurring.

Consistent overtime could lead to employee burnout which in turn can lead to further problems. Declines in productivity and an increase in mistakes are known to be the result of overworked employees. It’s also important to look out for employee well-being and manage workplace stress, as neglect can lead to poor mental health.

How to make overtime work for your business

To make sure overtime is a success for you and your employees it’s important to know not only your legal obligations, but also how to effectively communicate with your team. Regular employee reviews offer the perfect opportunity to check in on workload, productivity and well-being.

If overtime has become standard practice for your business, it could be time to consider expanding your workforce.

Whether you need advice on the legalities of overtime for your existing staff or are looking to recruit for your growing business, your local HR Dept can help.