6 Ways to Minimize the Impact of the New US Overtime Rules

Massive changes to existing and long established overtime regulations have recently taken place in the US that will make an estimated 1.3 million more workers across the country eligible for overtime pay.

Beginning Jan. 1, 2020, workers earning less than $35,568 annually must be paid one and a half times their regular hourly rate after the first 40 hours in a workweek. Depending on their duties, other workers may also have to be paid overtime.

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The US Department of Labor is offering three free webinars to help employers understand the new overtime rules and how to comply. Here are the dates and links to register:

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In 2014, it was estimated that around one third of all employees in the United States worked more than 40 hours in a week, finding it necessary to work extra hours to complete their tasks. In fact, largely because more women are working full time, American are working 7.8% more hours than they did in the 1970s. Under the new Department of Labor rule, it’s expected that many more will be filing overtime hours with their HR departments, which means that if you don’t already have a solid process and procedure in place, then now is the time to get prepared.

But don’t panic! By learning some effective time management tips, and checking out these crucial pointers for managing overtime like a boss, there’s really nothing that you need to be worried about!

Simplify complex policies

Review your overtime policy, reading it through the eyes of the employees. You may find that by simplifying your policy, you could actually minimize the amount of work that you need to do to approve each request.

Complex policies were actually at the root of a recent class action in California. At some company facilities, there was a flat “no overtime” policy. At others, the policy stated that prior approval for overtime must be given by two relevant managers; something that the employees stated was an “impossible task” when they were under pressure to get the job done. Ultimately, the company agreed to settle the case for $20 million.

This really shows just how many complex stages can often be involved in overtime policies, and begs the question: Could making policies more straightforward – and consistent — not only help businesses to achieve their goals, but also help to make HR and manager workloads more manageable?

Focus on organization

To manage overtime like a boss, we need to focus on overtime specifically, right? Well, maybe not. To properly manage overtime, it’s important to look at the bigger picture.

There was a very interesting study undertaken by the US Postal Service across the Northeastern states which found that managers who failed to effectively manage unscheduled leave ended up having to deal with more overtime. According to the report, “management did not effectively manage unscheduled leave, which contributed to overtime hours.” Makes sense, doesn’t it?

If we’re not properly handling other aspects such as employee leave, for example, the need for overtime will increase. Therefore, it’s essential to ensure your leave policies and your internal processes for handling vacations, sick days, appointments, parental leave, and unscheduled leave make sense, are consistent, and being carefully monitored by managers. By making sure there are enough resources to get the jobs done, overtime may be significantly reduced.

Track employee hours

It doesn’t matter whether you’ve been working in HR for years or you’re just starting out in your career, you know, or will quickly discover, that employees are bad — very bad — at tracking their time. With so many other tasks that need to be prioritized, filling in timesheets often ends up at the bottom of the list.

And the problem doesn’t end there. Even when employees do try to track their time, they’re often doing it days later, which means the hours they’re putting down probably aren’t all that accurate. According to studies of memory, people quickly forget what they learn. What did you have for lunch three days ago?

Managers themselves are no better.

So to really manage overtime and ensure workers are getting paid correctly, you need to be sure the hours your employees are logging are the hours they’re actually working. And to do this you’ll need help. Time tracking tools not only let employees log hours automatically through a digital “clock in, clock out” system, but also help you to verify details and approve hours more easily.

Technology can be a lot more effective in the long run than the older style timesheets that require time to be broken down into niche projects and activities. In terms of complying with overtime laws, it doesn’t matter what employees are actually doing , what counts is the hours they actually work. If employees are struggling to get timesheets completed, a tracking tool can be an efficient and suitable alternative to help HR managers ensure that staff are being paid for the correct number of hours they work.

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Analyze

One of the most vital aspects of good overtime management is what it can tell us about workforce practices. As an HR professional, you’re not only responsible for supporting employees, but also for supporting the business, and for raising concerns that can help it improve.

One of the other advantages that an automated tracking system offers is the ability to analyze time and attendance. You can do this with paper timesheets, but it’s much harder.

Analyzing overtime by team, division, manager, employee and so on, HR can spot potential problem areas before they grow unmanageable.

How? Well, it’s no secret that burnout is sabotaging retention. But what’s facilitating burnout? Overtime, for one. More overtime means fewer opportunities for rest and recovery, which in turn increases the risk of burnout. By detecting this early, you can alert managers discussing steps they might consider. At the end of the day, if you’re letting excessive overtime slip through the net, you’re ultimately lowering retention rates and raising expenses.

Minimize overtime

Of course, the absolute best way to manage overtime is to have less of it.

Ha! Easier said than done right? Well, being able to reduce overtime isn’t something that’s guaranteed, but there are a few methods that can minimize the need for extra hours.

Although there are any number of reasons for overtime, when it becomes endemic that’s often a sign there are not enough resources to complete the necessary tasks within the time given. And for that, there are really only two solutions:

  1. Get more people on the task by reassigning them or hiring, or
  2. Extending the deadlines.

To find the most suitable solution, a full analysis of internal processes may be required, but it’s possible that by improving scheduling and cross-training to boost skills across the organization, you could solve the problem.

Managing change

Understanding how to better manage overtime is a significant part of handling the big changes that are taking place within the HR industry right now. With HR professionals expected to receive more requests for overtime payments than ever before under the new rules, now is the perfect time to look at improving internal processes and honing management skills for efficient and effective working.

Rob Press is a content marketing manager at Deputy, a robust scheduling software that can be used to manage your workforce in a wide variety of different industries. Aside from helping businesses reach operational efficiency, he keeps up to date with the latest trends in SaaS, B2B, and technology in general.  

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