Why do companies hate having to pay overtime to their employees?
- curtisports2Lv 72 months agoFavorite Answer
How would you feel if you walked into a store and you were told, 'We've been open for 40 hours so far this week. As of now, we are raising our prices by 50% for the rest of the week,"?
Businesses don't do that, but you do pay more for things because companies build their labor costs, along with other costs, into their pricing. It was only past abuse of workers by SOME employers that created the concept of overtime pay that was first taken up by labor unions and is now law for all wage earners and most salaried workers.
Some companies routinely pay overtime - particularly manufacturing companies that run two or three shifts. It makes more economic sense to pay overtime than to go out and hire more workers, if the additional costs of the hiring, and training, and benefits paid to those workers, will cost more than the overtime pay. These tend to be large corporations. Small companies avoid paying overtime as much as possible, and some big ones do, too. My wife worked full time at Walmart for nine years and rarely saw any overtime. Management watched the hours closely.
- Casey YLv 72 months ago
Paying an extra 50% for the exact same work...thats why.
- 2 months ago
ok... I opened my store at 8 this morning.. IT is now 4 pm.. ALL MY PRICES are not at cost and 1/2.. Example.. That soda that was $1.00 is now $1.50.. I have to time and half my costs to pay for the time and half pay laws.
- JudyLv 72 months ago
Uh, it costs them a lot more
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- rustbucketLv 62 months ago
Companies do what they have to do to survive and make a profit if that includes overtime so be it.
- DEBSLv 72 months ago
Every company doesn't hate paying overtime. Sometimes it is the better financial move to pay a little overtime than to have another person on the books. Another employee is someone else to manage, schedule, etc.
If, however, a company has enough available employees to not have any of them work overtime, then logically why would they? Overtime costs them more. Aside from the typically 1.5 x hourly rate, the number of hours could change their status from part time to full time resulting in additional benefits the company must pay the employee.
- SlumlordLv 72 months ago
Duh, because it costs them money. Many times it will turn a small business profit into a small business loss and nobody can run at a continual loss for that long.
- WilliamLv 72 months ago
It depends on the situation.
1. OT funds comes out of projected profits.
2. If workers can't get the job done in the allotted time then they don't need to be paid OT.
3. Emergency missions warrant OT. When I was deployed we were told we were working 12 hour shifts. 8 hours regular pay and 4 hours OT and no days off.
- Donnie PorkoLv 72 months ago
Overtime = 1.5 * pay for every hour over 40 hours. So they’re paying you 50% more to do a job. Why would any boss like paying 50%.
- Anonymous2 months ago
Costs more money to do an hour's worth of work. If you took your car in to get repaired and you were told it was going to have to be done on overtime rates, what would you reaction be?