Employers often find themselves at loggerheads with employees over the calculation of overtime. Depending upon the business requirements overtime may be necessary. The amount of overtime allowed and the calculation thereof can be quite confusing. Where Bargaining Councils are involved, the rules may be slightly different but the concept remains the same.
Overtime is only applicable when the employer has requested it from an employee. In other words, should an employee decide to come to work early or work other shifts then he/she would not be entitled to be paid for the overtime as it is his/her choice and not per Company requirement.
Over the past 19 years, DYNAMIC LABOUR FRONTIERS, has identified these top 3 mistakes that employers, especially those in the SME-arena, make which could lead to a labour dispute.
-Too much overtime is paid which leads to financial loss.
-When a company has requested an employee to work overtime but cannot afford to pay him/her for this, no alternative method of compensation is agreed upon.
-Companies in certain industries are unaware that the calculation of overtime varies according to the nature of the business.
Overtime is considered after a 45 hour working week although, for example, the Metal and Engineering Industry is a 40 hour week and overtime would apply thereafter. Consideration must be given when a business normally operates on a Sunday as this may not necessarily fall within the overtime calculation at the “double” overtime rate.
A more complicated scenario would be the retail industry where an employee working for a retailer works shifts and all days are considered normal working days, except for Public Holidays. Although this is not really called overtime per se it still requires a separate calculation and the principal is the same.
Besides the financial loss suffered by paying too much overtime, the non-payment or lack thereof could result in a lack of productivity within the company or the Company could find themselves having to face the CCMA or Bargaining Council. Not all small and medium-sized companies are up to date with the correct calculation of overtime and it would be in their best interests to employ the services of a labour specialist. Failing to do so could cost you your time, your staff and even worse, your business.