Overpaying for overtime?: Practical tips to reduce costs

By Peter Israel
|Canadian Employment Law Today

Although every jurisdiction has minimum standards requiring the payment of overtime, employees and managers are often confused about who is eligible for overtime and how overtime is handled and paid. A policy statement regarding this subject is the easiest way to eliminate any confusion about this issue.

Although employees may appreciate the opportunity to earn extra pay through overtime, excessive overtime and its administration is expensive for employers.

Excessive overtime may lead to employee fatigue which, in turn, may affect absenteeism. Absenteeism usually leads to operational inefficiencies. Excessive use of overtime to achieve business objectives may indicate a weakness in planning, inadequate staffing levels or inefficient equipment for the job at hand. Therefore overtime hours worked and the costs associated with it should be tracked closely by all employers.