Posts Tagged ‘overtime rate’

Overtime Rate on 8s vs 12s

July 21st, 2009

One question that is often raised and the cause of confusion is the question about overtime on 8s vs 12s.

Will the amount of overtime change when changing from 8s to 12s?

The answer is: It depends on what is driving your overtime on the current schedule.

  1. If your overtime is driven by understaffing your overtime rate will not change. If there is more work to be done than can be accomplished in the scheduled 42 hours a week – any schedule that schedules employees for 42 hours will require the same number of hours worked beyond the scheduled 42. Only adequate staffing will reduce overtime in this situation.
  2. If your overtime is driven by scheduled absenteeism, you overtime rate will not change between 8-hr and 12-hr schedules. Most companies convert vacation entitlement into hours when switching to 12s. Each employee is normally entitled to the same amount of vacation hours as before and the need for coverage remains unchanged. Only staffing for scheduled absenteeism will reduce overtime in this situation.
  3. If your overtime is driven by short term, unscheduled absenteeism, you may see a reduction in absenteeism and overtime after changing from 8s to 12s. One reason behind this effect is the simple fact that on a 12-hr schedule employees typically get 91 more days off per year and chances that an employee feels sick is on a day off are a little higher.

If your absenteeism is driven by a mismatch between the social needs of the employees and the schedule pattern, a schedule pattern that involved the employees in the selection can result in a reduction in absenteeism and therefore overtime.