Creating Overtime Policies on Keka

Managing an organization entails numerous responsibilities, including the effective use of human resources. Employees often exceed their standard work hours to meet business needs. Such additional effort deserves recognition and proper compensation. Overtime policies help in standardizing this extra pay, ensuring fair treatment for all. If you're using Keka for your HR functions, setting up an overtime policy is a straightforward task.

To create an overtime policy, navigate to Time Attend (1) and then choose Overtime (2). In the Policies (3) section, you'll see various overtime policies that are already available. To make a new Overtime Policy, click Add Overtime Policy (4).

Next, the Add Overtime Policy window will open up. Under the Basic Information section, input the Policy Name and Description. You can then select whether you want to calculate overtime based on Gross Hours or Effective Hours. Once you've entered these details, click Save & Continue. 

In the Overtime Configuration section, you'll find three checkboxes for configuration options:

Working Day: This compensates employees for hours worked beyond their standard work time on a regular working day.

Weekly Off: This compensates employees for all work hours on their day off, except for half days.

Holiday: This compensates employees for all work hours on a holiday.

Select the checkbox where overtime is applicable.

The configurations for Working Day and Weekly Off are similar. You'll first choose if employees are to be Paid for Overtime hours worked or if they will be Awarded Comp Off.

If you choose Overtime payment, you'll need to configure:

- Whether employees are paid for all additional hours worked, only those before the shift, or only those after.

- The hours that count as Overtime and the Pay code to be used for overtime payment.

- If you'd like to disregard overtime pay if the extra hours worked are below a certain amount.

- How to handle situations when an employee is on leave for half a day.

When you opt for Awarding Comp-off instead of payment, the options are:

- Whether the Comp-off is credited based on a rate for each OT hour worked or awarded as a full or partial day.

- Which work hours are counted as overtime

- What are the minimum number of hours to be considered as OT.

- If you'd like to disregard overtime pay if the extra hours worked are below a certain amount.

- What happens if an employee is on leave for half a day

For Holidays also, you can also opt to either pay overtime or credit Comp-off with similar settings as above.

Based on the above configurations, you will have to decide how many comp-off hours will count as a full day, and if you are choosing to award comp-offs,  you must specify the leave type to which these comp-offs will be allocated.

In situations where an employee consistently works overtime for an extended period, you can select when to implement a different overtime pay rate and determine how long this rate will be in effect. Once decided, you can assign a specific pay code for these overtime hours.

Lastly, decide how to handle overtime hours that are in decimal form. You can either keep them as decimals or round them off. If rounding off, specify how it's done. Once everything is set, click Save & Continue.

In the Requests and Approvals section, you can stipulate whether employees need to inform their managers beforehand if they plan to work overtime. When this option is selected, only approved overtime will be considered. You can further specify:

- If advance notice is needed for overtime work.

- The maximum days of notice required.

- If a comment is necessary.

- The maximum number of OT hours an employee can request.

- If past-dated OT requests are allowed.

- How far back these past-dated requests can go.

- The approval chain for OT requests.

Once all settings are in place, click Save & Close.

By now, you should be well-versed in how to configure an overtime policy on Keka. For additional help, refer to our other articles or contact us. You may also like to learn how to create overtime pay codes or how to allocate overtime policies to employees.