Create a Policy
When it comes to paying wages, the most important factors are the hourly rates, hours worked and other conditions related to employment. Having clear policies regarding overtime since inception avoids many misunderstandings. By creating a strict overtime policy you can keep a check on overtime abuse.
Laws - Learn all you can about all the federal, state and local laws regarding overtime. Consult lawyers and the Department of Labor should you find something confusing. Understand these regulations and obey them by learning what they require you to do as an employer. There are some states that have overtime laws. When an employee is subject to state as well as federal overtime laws, he should be entitled to overtime that provides him higher pay. Many states have their own overtime laws so make sure your organization complies with each one, especially when your businesses are located in different states.
Exempt/Non-Exempt - Draw a clear line between exempt and non-exempt employees. Overtime wages should be paid only to non-exempt employees. Examples of exempt employees who are not eligible for overtime payments includes executives, lawyers and administrative staff.
Permission - Mention how, when and in what situations overtime is to be accepted. In case an employee wants to work overtime, he should seek the manager’s permission before doing so.
FLSA - Learn more about the Fair Labor Standards Act (FLSA). It gives a clear idea of which employees are considered eligible for overtime and which type of employees are not. Specifications such as what should be the pay scale for overtime, what if the employees work overtime on weekends or holidays, who is entitled to approve overtime, etc.
Policy - Based on the collected information and its analysis, create an overtime policy that covers all the aspects of overtime. Distribute it among all the employees and make sure they read it.
Training - Devise a training plan for managers and supervisors. Encourage them to follow overtime policies. After the training they will know when overtime is essential, procedures to seek and approve overtime, what they are expected to do if they notice an employee violating the overtime policy and how disciplinary meetings should be held regarding such violations. Schedule feedback or follow-up meetings with supervisors to ensure they understand the policies and hurdles they may encounter while implementing the policies. Keep the training protocol updated whenever the policies are modified.