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Company Overtime Policy Template

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Created by:

[Sender.FirstName][Sender.LastName][Sender.Company]

Prepared for:

[Employee.FirstName][Employee.LastName]

[Employee.Company]

Policy brief & purpose

[Sender.Company] understands that employees may sometimes be asked to work overtime in order to complete important projects, meet tight deadlines, or support other team members. This overtime policy explains how we will compensate employees for hours that they work beyond their standard working hours.

The purpose of this policy is to:

  • Ensure all employees are correctly compensated for all hours that they work overtime

  • Outline the procedures for seeking overtime authorization

  • Minimize instances of overtime abuse, productivity loss, health risks, and safety risks

Scope

This policy applies to all current, non-exempt employees at [Sender.Company]​. This includes employees who are part-time, full-time, and/or seasonal employees.

Policy elements

At [Sender.Company]​, "standard working hours" are defined as an employee's regularly-scheduled working hours. This may vary from employee to employee. Each employee's standard working hours are specified in their employee's contract and follow legal guidelines regarding minimum and/or maximum limits of hours.

"Overtime" is defined as the number of approved hours that an employee worked in addition to their standard working hours. This includes hours worked on weekends and on paid leave, such as holidays and sick leave. Extra time worked at the employee's discretion, such as working during lunch, working during breaks, arriving early, staying late, etc. is not considered overtime and is, therefore, not eligible for overtime compensation.

Eligibility

All current, non-exempt employees at [Sender.Company] are eligible for overtime compensation.

Exempt employees include employees working in supervisory or managerial positions.

Employees are classified as exempt or non-exempt according to overtime pay laws.

Procedure

All employees who anticipate needing hours of overtime must notify their supervisor(s) prior to working overtime in order to get their overtime hours approved for compensation.

Mandatory overtime

During busy periods, [Sender.Company] may require employees to work beyond their standard working hours.

Overtime is a condition of employment at [Sender.Company]. Employees are required to work overtime if they have been given reasonable notice by their supervisor of the anticipated overtime period.

If an employee has been given reasonable notice from their supervisor that they must work overtime and they refuse to do so, then disciplinary action may be taken. This disciplinary action may be termination of employment.

Employees have the right to reject a request to work overtime from their supervisor if they have been given less than (number of days) of notice before the expected period of overtime and/or if they have a valid reason why they are unable to work overtime during the requested period.

Authorized overtime

At [Sender.Company], it is the responsibility of the supervisor to assess the status of current and upcoming projects and their deadlines to determine if overtime hours will be needed and, if so, which employee(s) will be required to work overtime.

If the supervisor believes that overtime hours are required, they must obtain authorization from their manager before they can request that an employee or employees work overtime.

Supervisors must adhere to the below process when seeking authorization from their managers for overtime hours:

  • The supervisor must report to their manager for authorization of the desired overtime at least (number of days) before the expected overtime period.

  • If the manager approves the overtime, the manager will fill out an overtime report and submit it to [Sender.Company]'s finance department so that the employees who work overtime will receive their due overtime compensation.

  • Overtime compensation will be paid out to the employee(s) in the next upcoming pay cycle; this date of payment can vary depending on the date of submission of the overtime report.

Employees are authorized to overtime compensation for the authorized hours they work beyond their standard working hours regardless of where they work, as long as they perform work that [Sender.Company] accepts for business purposes.

Overuse of overtime

At [Sender.Company], it's important to us that we safeguard our employees' health and safety. As such, we do not tolerate excessive use of overtime nor abuse of the overtime system, either by supervisors or employees.

Supervisors are, therefore, encouraged to refrain from requesting employees to work overtime unless extenuating circumstances make it necessary. Moreover, supervisors are prohibited from requesting employees to frequently work overtime in order to complete projects and/or meet deadlines. If a supervisor's department is unable to complete projects and/or meet deadlines without the use of overtime for (number of months) consecutive months, then the supervisor's department will be subject to a formal review by their manager.

Supervisors who authorize employees to work overtime without following the aforementioned process for seeking authorization for overtime from their manager will be subject to disciplinary action.

Unauthorized overtime

While it is [Sender.Company]'s first priority to safeguard our employees' health and safety by protecting them from potential abuse of overtime by supervisors, we also must ensure that employees do not abuse overtime hours in order to increase their pay.

Employees are, therefore, prohibited from working unnecessary, unauthorized overtime in order to increase their pay.

Employees who work beyond their standard working hours without first obtaining authorization from their supervisor and manager to work overtime will be subject to disciplinary action. This disciplinary action may be termination of employment.

Moreover, employees who work beyond their regularly-scheduled working hours without first obtaining authorization from their supervisor and manager to work overtime will not receive financial compensation for the hours they worked overtime.

Compliance

To ensure that [Sender.Company] maintains accurate records of all hours employees work so they may be rightly compensated for qualified hours of overtime worked, all employees, supervisors, and managers must follow [Sender.Company]'s timekeeping systems.

For all employees who read this policy and have questions about the overtime policy at [Sender.Company], please contact our human resources department.

Signature
MM / DD / YYYY

Signature
MM / DD / YYYY

[Employee.FirstName][Employee.LastName]

[Sender.FirstName][Sender.LastName]

Company Overtime Policy Template

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