Overtime in Alberta

[vickyp]

#80218

Forum: Community

Hi there,
I have a few questions about overtime.
First of all, we do not have a documented OT policy in place.
We have a business where we ask employees to complete timesheets for client billing and we also have them track the time they spend on non-billable tasks. Previously, we would provide lieu time (not hour for hour) based on the amount of OT worked. Team members were aware that lieu time was available but we did not provide our ratio to them. Additionally, part of our bonus criteria was ensuring that our team members were compensated for this additional unpaid OT. IE – we would ensure that the amount of the bonus equated at a minimum to the level of OT investment. This was not communicated to team members. However, the opportunity to earn lieu time led to a number of team members inflating their timesheets in order to gain additional lieu time.
We have since revised how we do time tracking and only require team members to log their billable time (client work). We have communicated (not in a formal policy) that as long as they are getting their work done and it is good quality, we don’t need to see 40 hours of time logged. This means that there is no longer a visible means of tracking OT, instead we encourage our team members to talk to their leader about their workload and we also look at billable time and if it is greater than a certain number of hours (dependent on role – some team members do more internal tasks) we know that individuals are working OT and their leader has the discretion to give them lieu time. We will also consider client billing as a component of the bonus but we do not want to communicate that and risk having timesheets artificially inflated.
What is our level of risk here? We made these changes partly because we wanted to incentivize efficiency and build trust (if a team member can do their work in 6 hours one day, we trust them to manage their workload) and partly because we did not want documentation of OT. Is it better to have an OT policy and indicate that any OT must be approved in advance? Our culture is fairly flexible and relaxed and we trust our team members to do what is right and moving to a system where people have to seek approval detracts from that.
Additionally – if a team member fails to follow instructions and complete their work properly and puts in additional time to correct these mistakes must we compensate them for poor quality work?
Any insight on the best way to manage risk without destroying our culture and creating a system that incentivizes the wrong behaviours would be greatly appreciated.
Thank you,
Heather

[vickyp]

#80219

Wonderful questions. Sorry it took all day to get you an answer. Hope it was worth the wait. From our payroll guru, Alan McEwan:
*****
Glenn, a few points for the client to consider:

1. With some exceptions, employers are required to keep proper records of the actual hours worked and provide this information to employees via the pay statement. The records themselves must be kept on a daily basis, but may be summarized by pay period on the pay statement. Overtime hours worked must be recorded separately and shown separately on the pay statement.
2. It would be helpful to know what industry is involved, as there may be exceptions that apply. The requirement to track actual hours worked does not apply to IT professionals, for example.
3. Employees are also entitled, on request, to a written explanation of how any bonuses have been calculated.
4. Paid time off in lieu of overtime worked must be given as 1.5 hours off for each overtime hour worked.
5. Employees must be paid for the time worked, even if their work is below standards for quality.

I have always believed its better to manage by results, rather than requiring employees to seek approval for overtime in advance.
My own suggestions would be:

1. To put in place a time and attendance system that allows employees to record all their billable and non-billable time, in the simplest manner possible. This can be done without becoming an administrative burden.
2. Rather than requiring employees to seek approval in advance for overtime, it would be better to treat this is a performance issue. If employees work overtime, when this is not required for billable time or they are not working efficiently, then this should be discussed as a performance issue. In other words, its better to manage this by exception, instead of imposing approval requirements.
3. It would be better to separate bonus calculations from OT hours worked. Instead, employees given be given bonuses based on their results, rather than on a measure of their work efforts.

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