Why a cap? Is OT a condition on hiring? If so, why? Can't you manage the dept on straight time workers?
I truly don't understand why some people see OT as a benefit. If people want to work OT fine. But, if they can work regular hours and do the job what's the complaint based on, then?
Typically, OT is paid at a higher rate on many pay scales. So, some see the OT work as a pay raise for doing the same kind/type of work.
Some say that "compounding interest is a working man's best friend." That may be true, but if so, OT is maybe the working man's second best friend.
As a salaried employee, I don't get the benefit of OT, but I'm not complaining.
As others have pointed out, OT hours are incrementally less expensive than base pay hours, even if the employee is being paid 1.5 times their hourly rate for OT.
But my experience in manufacturing is that OT is almost an essential mechanism for handling the ups and down of a competitive company. If you don't want to be running a "hire and fire" operation, then you need a different approach for when sales decline, whether that is because the newer products are disappointing or whether it is because the overall economy is contracting.
If people are working an average of 10 hours OT on top of a 40 hour week, then contracting the business by twenty percent is as simple as reducing overtime to zero. (This is typically much more complicated by the fact that not all product lines contract by the same amount.)
Handling a sales contraction of twenty percent would otherwise have entailed laying off twenty percent of the workforce; a very unpleasant undertaking.
>>Why a cap?<<
All hourly positions are capped.
>>Is OT a condition on hiring?<<
It’s mandatory, and applicants are informed of such.
>>If so, why? Can’t you manage the dept on straight time workers?<<
We’re a Tier 1 supplier and business is booming in the auto industry. If our customers are working, so are we.