Overtime Policy Template

Overtime Policy

Purpose of Overtime Policy

This Overtime Policy explains [Company Name] expectations, procedures, and entitlements related to working hours that exceed an employee's regularly scheduled time. The policy exists to ensure consistent treatment of employees, accurate timekeeping, fair compensation, and efficient management of staffing needs.

Scope and Eligibility

This policy applies to all employees of [Company Name] unless a separate written agreement or employment contract supersedes it. Eligibility for overtime pay or compensatory time depends on an employee's classification and local employment rules.

Definitions

• Overtime: Time worked beyond an employee's scheduled or standard work period as defined by the employer.
• Non-exempt employee: An employee eligible for overtime compensation under applicable rules and company classification.
• Exempt employee: An employee not eligible for overtime compensation under company classification.

Authorization and Approval

All overtime must be approved in advance by the employee's manager except in emergency situations. Unauthorized overtime may not be paid and may be subject to corrective action. Managers are responsible for approving overtime in line with operational needs and budget constraints.

Calculation and Payment

Overtime compensation and its calculation will follow company practices for pay rates or compensatory time as applicable. Pay or compensatory time for overtime will be calculated based on documented hours worked and the employee's applicable rate of pay. Payroll will process overtime compensation following submission and approval of accurate time records.

Timekeeping and Recording

Employees must accurately record all hours worked using the company timekeeping system. Time records must reflect start and end times and any unpaid breaks. Falsifying time records or intentionally misreporting hours is prohibited and will be subject to disciplinary action.

Exempt Employees and Exceptions

Exempt employees are typically not eligible for overtime compensation but should record hours as required by department practice. Any exception to normal overtime treatment for exempt or non-exempt staff must be documented and approved by HR and the relevant manager.

Compensatory Time

If compensatory time in lieu of cash payment is permitted by company policy, supervisors must obtain prior approval before offering or granting compensatory time. Compensatory time balances must be tracked and used within timeframes established by the company.

Approval Process

Requests for scheduled overtime should be submitted through the established process, which may include a written request or entry in the timekeeping or scheduling system. For unscheduled or emergency overtime, employees should notify their manager as soon as possible and document the hours worked.

Role of managers and HR

• Managers: Approve or deny overtime requests, ensure operational justification, monitor overtime budgets, and confirm accurate time submissions before forwarding for payroll.
• HR: Provide guidance on classification and eligibility, review exception requests, maintain policy records, and support managers with compliance and consistency.

Non-Compliance

Failure to follow this Overtime Policy, including working unauthorized overtime, failing to obtain required approvals, or falsifying time records, may result in corrective action up to and including termination. Managers who consistently fail to control or approve overtime appropriately may face disciplinary measures. Payroll adjustments may be made to correct errors in time reporting.

Note

[Company Name] may amend this Overtime Policy periodically to reflect changes in business needs or applicable requirements. Employees should consult their manager or HR representative for clarification about how this policy applies to their role.