When it comes to running a successful business, there are a few things that remain true no matter how many employees you have or what industry you’re in.

One of these things is the importance of accurately calculating employee overtime. No matter what size your company is, having a system that can help you to accurately keep track of hours worked, and overtime worked, isn’t just a good idea, it’s vital.

Whether you have an old-fashioned pen and paper system or a robust time tracking software program, the fact remains that it’s your responsibility to accurately pay your employees for overtime that they’ve worked. You can use the information that they provide in their timesheets as additional confirmation, but the responsibility for calculating actual hours worked, and compensating properly falls on the employer.

According to the Bureau of Labor Statistics, the average American worker works slightly more than four hours of overtime per week, or, 208 hours per year. Estimating an average wage of $21 per hour time-and-a-half pay, this works out to $6,552 per employee each year. For companies with multiple employees, it’s easy to see how this can quickly add up. Then there are the health risks that are associated with working overtime; with one study showing a connection between people who work 55 or more hours per week and cardiovascular disease.

With this in mind, let’s look at a few important steps that you can do to accurately calculate employee overtime, while at the same time improving your overtime management system.

Ensuring Accuracy With Time Tracking Software

Although you’ll want to ensure that you’re paying your employees for time worked, you’ll also want to ensure that you’re not overpaying them.

With mobile time tracking software, you can also ensure that your team is paid only for hours worked; saving you from having to pay for time that wasn’t recorded properly, or hours that may have been exaggerated. With a mobile system, it doesn’t matter where your team is working –from home, in the field, or out of the office, you’ll be able to ensure that they’re on-site working when they claim to be. You can choose a system that collects GPS data, and one that requires sign-in via QR code or with webcam verification.

Upgrade Your Scheduling System

When it comes to overtime, it’s important to ensure that your team is picking up extra hours because there was a need for them, not because of scheduling errors. Ineffective scheduling or scheduling errors can result in overbooking, which will impact your bottom line.

Being a business owner is time consuming, so here are some ways to easily calculate employee overtime.Not having enough employees to ensure all the jobs are filled isn’t a good reason to make your employees work overtime. While occasionally, employees will get sick, quit, or otherwise leave a gap that requires some overtime, it shouldn’t be a regular and constant occurrence. By not hiring and having enough employees onboard to fill all the positions, other employees can quickly burn out. By overworking your team, you open the doors to more errors, mistakes, and even injury.

Improve Time Management

Poor time management can also create a perceived need for overtime. While sometimes, there is a real need for additional staff, often, what appears like a short-staffing situation could be an issue with your team being unclear on the extent of their duties, or otherwise lacking the time management skills to finish everything during the allotted hours. Ensuring that you, or your managers have a good grasp of time management is important. A good manager will be able to help your employees to manage their time better and will be able to ensure that work is done as efficiently as possible, reducing the need for unnecessary staff and eliminating employee lateness.

Tools and Training

Finally, you should also be sure to give your employees the tools and training required to complete their work in an appropriate time manner. Help them work towards being more efficient in their work.