I often spend time working in cafes, parks and other places and sometimes (not intentionally) I hear employees complain about their job particularly having to work overtime without pay. This is common even to small businesses. I know many small business owners and one of the main reasons why unpaid overtime work is implemented is because some employees are not performing their job during the regular working hours. But still, that is not a good excuse.
As a small business owner I sometimes feel that there is something wrong in our world where majority of people get paid by the number of hours they spent at work and not really by the number of value they produce. This model became popular in the industrial age particularly in the manufacturing sector where the number of hours a person spent on the job is almost synonymous to the goods that they produce because everything runs on schedule, on a conveyor or assembly line. Nowadays, we are starting to see industries where this model is no longer adopted especially with the rise of the platform based services where the payment is based on productivity. It is also happening in some manufacturing companies where people get paid by the actual products that they produce and we can expect to see it grow more in next coming years.
Today in general, here in the Philippines, wages by the hour is still the norm and it might take a while for it to change. If we look at labor laws particularly on computation of wages, it is still largely based on attendance and not from actual productivity.
Since it is what we call “normal”, it is hard for people not to feel bad whenever they work extended hours and not get paid. With this article, we will discuss some more reasons why you should not implement OTY or thank you overtime aka unpaid overtime to your employees.
1 Overtime Work Can Cause Fatigue and De-motivation
Working overtime alone can cause demotivation and demoralization to employees simply because, they already spent whole day working with you and you want to further extend it? The worst is, they are working more hours and yet they will receive the same amount. Many people are looking forward to go home early so they can do other things that they love or to spend time with their love ones which for them equates to happiness. By working overtime, the hours that they are looking forward to is taken away from them. Sure enough, the next thing that they will look forward to is leaving the company in order to do the things that they love and that might not be good for you.
2 Is it really productive?
The main reason why I personally don’t like implementing overtime work is because I don’t think it is productive. I also became an employee once and most of the time during my overtime work; I was not productive since I am already tired and losing focus. Much more worst is, according to DOLE’s records, there are many accidents happened during overtime work because during those times, employees have a tendency to lose focus, rush things and neglect safety procedures. Many of these accidents resulted to loss of life and irrecoverable damage to properties.
If you think your employees really need to work overtime, make sure you have a metrics in place where you can measure their productivity. Remember that regular overtime work per hour will cost you 25% more of your employees hourly rate (this is even more costly during rest days and holidays) now by doing overtime work, did they produced at least 25% more?
3 Against Labor Law
The number one reason not to implement unpaid overtime work is because it is against the labor law and DOLE is really working hard to implement it. In DOLEs website, handbook and other publications, it is clearly stated that all worked hours beyond the regular 8 hours should be paid as overtime and it is computed as 125% of their hourly rate or 25% more. You might be able to get away from it now but you will pay it later when they conducted an audit to your establishment and look at your records and talk to your employees.
If you notice that overtime work is getting more frequent in your company, you might want to consider hiring additional manpower instead.