Shawnee Love •
July 28, 2016
A secret truth is that many companies would love to have employees working overtime (i.e., longer days or weeks) for straight time pay.
It’s usually not because the companies are cheap (although there are some of those around too). Instead, it usually stems from the fact that the company has bid on lots of work expecting to get some of it. However, they get more contracts than they expected, which is a good problem to have, but for the fact that they need staff to do the work. The problem becomes:
If they have to pay overtime, they eliminate their margins on the sale
If they have to hire and train, the associated delays and costs may mean they can’t deliver the services / goods in time or may again eliminate their margins.
Unfortunately, except for managers and a number of industries who have specifically relaxed the hours of work rules to suit industry demands, most employers can’t legally ask their employees to work overtime (OT) for straight time pay. Even if the employee wants the hours and agrees to be paid their regular wage while doing overtime, it isn’t legal and if ever a complaint was raised to the minimum standards board or tribunal, the employer would be expected to come up with the OT pay.
If you find yourself in this situation, here are some of the paths I have seen organizations take:
- Build overtime into your bids (Risk overpricing your bids and losing contracts),
- Keep a casual roster of trained workers or contractors who can parachute in if needed (Recognize the investment may be a waste if you don’t get the contracts)
- Set up an averaging agreement (Works well if you have a consistent schedule but not if you want true flexibility of hours)
- Pay OT (Create lower margins and/or go into the red!)
- Unionize (Clearly this is tongue and cheek, but in truth, an employee group represented by a union can agree to terms outside of the minimums required by law. It just doesn’t usually happen – or at least not without giving up something significant in return.)
- Ignore the rules and pay straight time to the people who want to work and are willing to do it for straight time (Hate to admit it but if no one complains to the employment standards branch then it is sometimes the approach taken because when it comes to hours of work, the laws haven’t kept up to the business’ needs and employees’ desires for flexibility.)
As you can see, none of these options are perfect solutions. In my opinion, the right thing to do is to build up your savings so when you have to go into the red (and pay overtime and/or hire more staff because you have work for them) to get to the next level of business, you have a nest egg to draw on while costs exceed revenues. If you time it right, you should be back in black in no time. But that is easier said than done when your business is growing fast, which is why there are so many different approaches to the same issue.
What say you?