For a lot of people the opportunity to work overtime is exciting, seeing nothing but the extra dollars but while occasional overtime can be useful (for both your savings and productivity) excessive overtime can create some serious issues.
Increased Health problems – Working extended hours can take a toll on ones mental and physical health if continued for long periods of time. High blood pressure, headaches, diabetes, depression and anxiety, obesity are just some of the health problems that are caused by stress.
Increased safety risk – When working excessive overtime workers are generally are tired which can impair performance and lower attention. This raises the risk of accidents and injuries occurring in the workplace as a result of exhaustion and errors.
Decreased Productivity – Studies and reports suggest that productivity can suffer with increased overtime hours. In white-collar jobs, performance decreases by as much as 25% when 60 or more hours are worked in a week.
Increased Absenteeism – Excessive overtime can lead to absenteeism as a result of poor health, fatigue, or people simply needing to take time off. Absences often need to be covered by replacement employees, often working overtime themselves, making the problem self-perpetuating.
Increased Turnover rates – follows that another adverse effect of excessive absenteeism will be increased turnover, as the lack of work-life balance and fatigue resulting from excessive overtime finally catch up with some employees. Again, as with absenteeism, companies with high turnover are also likely to have high overtime, as employees must work to make up for vacant positions if demand is to be met.
Budget Dependency – If you are working overtime regularly, it is likely you will begin to rely on this additional income and let your expenses creep up to match it. This can be a problem. While there may be plenty of overtime available at the moment, the situation can change with little notice and so, too, will your finances.
What is deemed excessive overtime?
Overtime is when an employee works extra time. It can include work done:
• beyond their ordinary hours of work
• outside the agreed number of hours
• outside the spread of ordinary hours (the times of the day ordinary hours can be worked)
According to work FairWork, an employer can request that an employee works reasonable overtime. Overtime can be reasonable so long as the following things are taken into account:
• any risk to health and safety from working the extra hours
• the employee’s personal situation, including their family responsibilities
• the needs of the workplace
• if the employee is entitled to receive overtime payments or penalty rates for working the extra hours
• if they are paid at a higher rate on the understanding that they work some overtime
• if the employee was given enough notice that they may have to work overtime
• if the employee has already stated they can’t ever work overtime
• the usual patterns of work in the industry.
An employee can refuse to work overtime, if the request is unreasonable.
It is important that health and safety issues are considered and managed if an employee has to work overtime. For a number of industries an award, enterprise agreement of other registered agreement will set out when overtime rates apply. To find out more information on when overtime rates are applied you can search by your industry here.