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California is one of the few states with overtime laws that differ from the federal guidelines. Companies in California are required to pay overtime when employees work more than 8 hours a day. This is why 12-hour shifts are rarely used in that state.
I have never attempted to understand this state's complex requirements and exceptions. I always advise prospective clients to have their legal representative research this before having me design schedules with anything other than 8-hour shifts.
Recently, I was contacted by Cindy Opeka of O'Peka HR Consulting who stated that she might be able to help. I don't have first-hand experience with her expertise, but thought I would share her comments with you. Here's what she said:
"I'm currently working with a client who is dealing with the Department of Labor. They are up against thousands of dollars in fines. If you work with CA customers, I'd be happy to share info at no charge. I just want to help small employers avoid penalties."
If you would like to reach her, the website is https://hrsolutions-oc.com/. Her email address is: copeka@comcast.net and her phone number is: (916) 337-4719.
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For 24/7 operations, the easiest way to create a high-overtime schedule is to reduce the number of crews. That's because there is an inverse relationship between the number of crews and the average weekly hours the employees have to work as shown below:
Crews Hours
3 56
3.5 48
4 42
5 33.6
I don't recommend using schedules with that much overtime. People that do this claim it's temporary or it's a common practice in their industry. I explain that high overtime schedules cause problems in the following areas: safety, quality, and employee health. There is also the risk of liability for an employee who crashed his or her car on the commute home after five or six consecutive night shifts.
Every month or so I get a call from someone who wants to run a schedule that would normally take 16 people, but they only want to use 12 or 14 employees. They ask me to give them a pattern (like 4-on-2-off) that would work. Instead of focusing on the pattern, they should start by deciding the number crews – either 3 or 3.5 crews.
I see this a lot with fire departments and paramedics. They work 24-hour shifts, and want to know if a 2-on-4-off pattern or a combination of 10 and 14-hour shifts would reduce the overtime. I explain that they need to start with the desired weekly hours of work and select the number of crews that comes closest to that target. Then and only then can they start searching for a work pattern (or different shift lengths) that provides the desired coverage.
I ran into the opposite situation recently with a major airport. Their screening officers were assigned to 5 crews on an 8-hour rotating shift schedule with a 3-on-2-off pattern. Management wanted to get more coverage without hiring more employees. I suggested 4 crew patterns that averaged 42 hours a week. By increasing the average weekly hours from 33.6 to 42, they were able to increase the coverage from 56 to 70.
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This is the 7th an final post in a series on Fatigue in the Workplace. Previous posts on this topic have covered the impact of: (1) education, (2) start times, (3) shift length, (4 consecutive days of work, (5) rotating shifts, and (6) employee preferences. Today's post will address the role of overtime in employee alertness and fatigue.
Let's face it, overtime disrupts people's lives. They have plans that get changed at the last minute. They are forced to work when they had other plans. How do they respond? Forfeiting sleep is one of the most common ways employees try to recover time off lost to overtime.
How much overtime is too much is a difficult question to answer. Most companies feel that an annual average of between 5% and 15% is about right. However, there are a lot of considerations other than alertness that go into finding the perfect amount for any operation. You may wish to read a more complete article on the impact of high overtime (http://www.shift-schedule-design.com/preview/uploaded/files/Overtime%).
Here is a quick summary from the above referenced article. "Our surveys of shiftworkers show that, on average, they get 21% less sleep time on the days they work than the days they are off. When employees work lots of overtime, they don't get time off to recover or catch up on their sleep. This, in turn, can lead to fatigue and reduced alertness. Managers simply cannot ignore the possibility of increased safety and quality incidents under these conditions."
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My latest client was a Fire Chief who was facing pressure from city management to change from a 24-hour schedule (48/96) to an 8-hour schedule. I assume that the city officials mistakenly believed that 8-hour schedules don't have any overtime in them. Like many public agencies, they think all overtime is bad and should be eliminated.
I started by showing the Chief what the current schedule looked like on a spreadsheet. It's a 6-week pattern with 6 teams working an average of 56 hours a week. The only way to get rid of the overtime is to add more staff. Shall I repeat that? The ONLY WAY to get rid of the overtime is by hiring more staff. Not changing the shift length. Not changing the work pattern. MORE EMPLOYEES is the only way.
With his coverage requirements (4 people at all times), the current schedule required 12 employees. By increasing the staff to 16, they could lower the average hours worked to 42 hours/week. It didn't matter whether they used 8-hour, 12-hour, or 24-hour shifts. All three approaches (with the exception of 8-hour fixed shifts, which would require 18 people) would need 16 employees averaging 42 hours a week.
What the city folks should have asked was:
Would adding 4 more employees cost less than the current approach (12 employees at 56 hours/week vs. 16 employees at 42 hours/week)?
And, if it is, is it worth disrupting the workforce and causing numerous personnel issues?
Overtime is really a substitute for staffing. In 24/7 operations, a little overtime can save a bundle. In this city's case, the answer is not so clear. However, the belief that changing to a different shift length would eliminate the overtime is not accurate. The only way to lower the overtime would be to hire more staff.
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I've written several articles about 12-hour shift schedules in 24/7 operations. Here are links to the most popular ones:
https://www.shift-schedule-design.com/12-Hour_Shifts
https://www.shift-schedule-design.com/Blog?m8:post=12-hour-shifts-in-smaller-companies
https://www.shift-schedule-design.com/Blog?m8:post=matching-12-hour-shifts-to-your-workload-distribution
https://www.shift-schedule-design.com/Blog?m8:post=covering-absences-on-a-12-hour-shift-schedule
https://www.shift-schedule-design.com/Blog?m8:post=are-12-hour-shifts-too-long
I also sell 2 packages with 10 different options: one with only 12-hour fixed shifts and another with only 12-hour rotating shifts. You can read more about this here: Schedule Examples
Most 12-hour shift schedules for 24/7 coverage use 4 crews. When you divide the hours in a week (168) by 4 crews, you get a average of 42 hours/week. With 12-hour shifts, this will require half the work weeks to be 36 hours (three 12-hour shifts) and half to be 48 hours (four 12-hour shifts).
In many organizations, especially public agencies, avoiding overtime is a high priority. They view overtime as evil or an unnecessary expense. I have repeatedly tried to argue the fallacy of this belief, yet I continue to get requests for 12-hour schedules with no overtime in them. Here are 2 articles on this topic:
http://www.shift-schedule-design.com/Overtime_Issues
https://www.shift-schedule-design.com/Blog?m8:post=why-eliminating-overtime-in-24-7-schedules-can-be-costly,
Reducing the hours of work to 40 or less a week will result in gaps in the coverage and will require additional personnel to fill the gaps. In most cases, this is more expensive than simply keeping overtime in the schedule. In addition to higher costs, this will also require other sacrifices as seen in the following four approaches to eliminating overtime in 12-hour schedules for 24/7 coverage.
Here is a key to the symbols used in the schedules below:
D12 = 12-hour day shift
N12 = 12-hour night shift
d8 = 8-hour day shift
n8 = 8-hour night shift
d4 = 4-hour day shift
a4 = 4-hour afternoon shift
e4 = 4-hour evening shift
n4 = 4-hour night shift
Here is how the schedules work. When the schedule first starts, the crews are assigned to specific weeks in the cycle. Crew A is assigned to start in Week 1, Crew B is assigned to start in Week 2, and so on. At the end of each week, the crews rotate down to the next week in the cycle. Crew A moves to Week 2, Crew B moves to Week 3, etc. When a crew completes the last week, they rotate up to Week 1.
1. Eliminate the 48-hour work weeks. This sounds simple enough. Just change all the 48-hour work weeks to 36 hours by eliminating one of the shifts. To maintain the same coverage, this will require 5 crews (a 25% increase in headcount), rotating shifts, and a 4-hour pay cut for all employees. (Note that with fixed shifts, this would require 6 crews). There will also be one shift with double coverage (in the example below, it's the Friday day shift). Here's one example of a 5-crew schedule:
Crew / Week
Mon
Tue
Wed
Thu
Fri
Sat
Sun
Hours
A / Week 1
-
-
-
-
D12
D12
D12
36
B / Week 2
D12
-
-
D12
D12
-
-
36
C / Week 3
-
D12
D12
-
-
-
N12
36
D / Week 4
N12
-
-
-
N12
N12
-
36
E / Week 5
-
N12
N12
N12
-
-
-
36
Average
36
2. Include an 8-hour shift. If you devote one day a week to 8-hour shifts and give one of the three 8-hour shifts to employees who are outside the group (e.g., part-time employees), the remaining four crews would average 40 hours a week. You would have to use a 12-hour work pattern in which the 36-hour weeks and 48-hour weeks are staggered and you would have to be able to average the work hours over a 2-week period (most companies can't do this because of overtime laws). In the sample shown below, the 8-hour afternoon shift on Wednesday would have to be given to employees who are not part of the four crews. That uncovered shift is not shown in the table below.
Crew / Week
Mon
Tue
Wed
Thu
Fri
Sat
Sun
Hours
A / Week 1
-
D12
d8
-
-
D12
D12
44
B / Week 2
D12
-
-
D12
D12
-
-
36
C / Week 3
-
N12
n8
-
-
N12
N12
44
D / Week 4
N12
-
-
N12
N12
-
-
36
Average
40
3. Include a 4-hour shift. If you devote one day a week to 4-hour shifts and give two 4-hour shifts (or one 8-hour shift) to employees who are outside the group, the remaining four crews would average 40 hours a week. This does not require the averaging of pay over a 2-week period or a pattern with staggered 36 and 48-hour weeks. In the sample shown below, there is an 8-hour gap in coverage on Wednesday that would have to be given to part-time employees or someone outside the four crews. That uncovered shift is not shown in the table below.
Crew / Week
Mon
Tue
Wed
Thu
Fri
Sat
Sun
Hours
A / Week 1
-
D12
d4
-
-
D12
D12
40
B / Week 2
D12
-
a4
D12
D12
-
-
40
C / Week 3
-
N12
n4
-
-
N12
N12
40
D / Week 4
N12
-
e4
N12
N12
-
-
40
Average
40
4. Reduce the work days to 11.5 hours. If you include a 30-minute unpaid meal break in the 12-hour shift, you only have to pay employees for 11.5 hours. You would have to adopt a 12-hour shift pattern in which the 48-hour weeks and 36-hour weeks were staggered. This won't completely eliminate the overtime, and you would have to be able to average the work hours over a 2-week period. An example is shown below:
Crew / Week
Mon
Tue
Wed
Thu
Fri
Sat
Sun
Hours
A / Week 1
-
D11.5
D11.5
-
-
D11.5
D11.5
46
B / Week 2
D11.5
-
-
D11.5
D11.5
-
-
34.5
C / Week 3
-
N11.5
N11.5
-
-
N11.5
N11.5
46
D / Week 4
N11.5
-
-
N11.5
N11.5
-
-
34.5
Average
40.25
If you are subject to Federal law that requires overtime after 40 hours a week, you won't be able to use Options #2 or #4. These can only be used by organizations such as police departments that are allowed to average the work hours over a 2-week period.
If you don't have enough part-time employees or you don't have employees from another department to cover the 8-hour gap in coverage every week, you'll won't be able to use Options #2 or #3. You'll either need a 5-crew schedule (see Option #1), a schedule with 11.5-hour shifts (see Option #4), or a crewless schedule that is custom-designed around your staff size.
Let's do a quick cost comparison of 4-crew schedules vs. 5-crew schedules:
4 crews * 40 hours/week * 1.4 benefit loading cost + 4 crews * 4 hours of OT pay/week = 240 hours of pay/week
5 crews * 36-hours/week * 1.4 benefit loading cost = 252 hours of pay/week
If you already have enough staff to create a 5-crew schedule, here's a way to save money. Keep the OT in the schedule and use your extra capacity to build relief coverage into the schedule to cover absences. Similar to Option #1, you would have a 5-week schedule that averages 42 hours a week. The difference is that the 5th week of the schedule would be devoted to relief coverage.
Doing this would shift the OT from outside the schedule to inside the schedule. When the overtime is outside the schedule, it requires volunteers or forced / mandated overtime. When it's inside the schedule, it is shared equally by the entire staff. In many cases, the total overtime is less. You can read more about this here: https://www.shift-schedule-design.com/Blog?m8:post=you-can-t-eliminate-overtime-but-you-might-be-able-to-reduce-it.
We sell packages of 12-hour shifts for $199 apiece. One packages has 10 options with only fixed shifts and the other has 10 options with only rotating shifts. These all average 42 hours a week. You can read more about it here: https://www.shift-schedule-design.com/Schedule_Examples.
If you need help designing a 12-hour schedule with no overtime (e.g., to match your pay week or to accommodate a few part-time employees), please fill out this form: https://www.shift-schedule-design.com/21.html
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It's amazing how many people contact me about 24/7 schedules with no overtime in them. I warn them that this will not necessarily lower their costs. I also explain that avoiding overtime in the schedule will not eliminate the need for overtime. OT will still be needed to cover absences or temporary increases in demand. Here are links to two articles I've previously written on this subject:
Overtime Issues
Why Eliminating OT Can Be Costly
It's best to think of overtime as a way to increase the size of your staff without adding to the headcount. A small amount of overtime in the schedule means you will need fewer employees to produce a specific amount of coverage. Overtime also can enable you to build relief coverage into the schedule to cover absences. In some cases, it's possible to reduce the total overtime by doing this (https://www.shift-schedule-design.com/Blog?m8:post=you-can-t-eliminate-overtime-but-you-might-be-able-to-reduce-it).
The bottom line is: if you eliminate overtime from the schedule, you will increase the staffing requirements. In most cases, the increased headcount will be more expensive than the overtime was.
Despite these words of warning, I know that some of you still want to see schedules with only 40 hour work weeks. Let's take a look at an example using 8-hour rotating shifts. If you want a 12-hour schedule without overtime, I suggest you read this other blog post here.
This is a 5-crew schedule that follows a 5-week schedule. Crew A begins the schedule in Week 1, Crew B begins in Week 2, and so on. When the crews finish their first week, they move down to the next week of the schedule. When they finish Week 5, they start the cycle over again with Week 1. All five crews are working the same 5-week schedule. It's just that they are always in different weeks of that pattern.
You'll note that the 5th week of the schedule has only one required shift: the Tuesday night shift. The prior four shifts are relief shifts. These can be used to cover absences or for training, maintenance, or special projects. The only downside is that it doesn't cover every day of the week. Had we adopted a schedule that averaged 42 hours a week, we could have had relief coverage for every day of the week.
Is it worth eliminating the overtime? Let's look at the numbers.
We eliminated 2 hours of overtime a week for every employee. That will reduce the costs by 7.5%.
2 hours OT/week * 1.5 OT premium = 3 hours/week
3 hours/week saved / 40 hours/week = 7.5% savings
We also have gained 4 days of relief coverage each week. If the absence rate is 10% of the normal weekly hours of work, this will reduce costs another 8.6%.
4 / 7 days of coverage/week * 10% absence rate * 1.5 OT premium = 8.57%
This means that the total savings is 16.1% (7.5% + 8.6% = 16.1%). However, we have increased the headcount by 25% by adding a fifth crew, which is far more than the 16.1% we saved.
Want to read more about 8-hour shift schedules? Here are links to several articles I've written:
https://www.shift-schedule-design.com/Blog?m8:post=8-hour-shift-schedules-for-24-7-coverage
https://www.shift-schedule-design.com/Blog?m8:post=8-hour-rotating-shift-schedules
https://www.shift-schedule-design.com/Blog?m8:post=8-hour-fixed-shift-schedules
https://www.shift-schedule-design.com/Blog?m8:post=mixing-8-hour-and-12-hour-shifts
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Most organizations cannot eliminate ALL of the overtime without sacrificing production or service levels. There are three situations in which overtime is going to be necessary: (1) the work volume temporarily increases, (2) a position is vacant, or (3) someone is absent (vacation, illness, training, etc.). I refer to this as overtime incurred outside the normal work schedule.
Sometimes it's possible to reduce overtime by swapping where it occurs. If you increase the overtime within the regular work schedule (e.g., by increasing the average hours of work from 40 to 42 per week), it may be possible to reduce the need for overtime outside the schedule. In some cases, the total overtime will be reduced.
I know, you're going to argue that overtime should be given to those employees who want it the most and volunteer for it. That's fine - up to a point. But when the overtime becomes excessive or when it continues so long that employees become addicted to it, then it's a problem. Or when you run out of volunteers and have to rely on mandatory, forced overtime to achieve or maintain the desired coverage levels - that's not good.
Here are two examples that illustrate the benefits of increasing overtime in the schedule to reduce overtime that occurs outside the schedule.
Example #1
A police department needs two people working at all times on a 24/7 basis. They are using 9 officers with an 8-hour rotating shift schedule because they don't want any overtime in the schedule. The problem is, like most law enforcement agencies, they have a high absence rate which causes their overtime to bust the budget.
If they built a small amount of overtime into the schedule, they could free up enough capacity to have a full week of relief coverage. They would need a 9-week schedule in which 8 weeks were devoted to the required coverage and 1 week was devoted to relief coverage. All 9 employees would share the relief responsibility equally. With rotating shifts, this relief coverage could be used to cover absences on any shift. It doesn't mean the relief employee would work all week; it simply means they are on-call for that week. If someone was scheduled for vacation, the relief person would work the vacationer's schedule that week and nothing more. If no one took vacation, the relief person could work a Mon-Fri day shift or go to training or work on a special project.
So the tradeoff is 2 hours of overtime for all 9 employees every week (18 hours of total overtime) in exchange for the flexibility to cover 40 to 48 hours of absences a week. Granted, someone won't be on vacation every week, but isn't it compelling to use 18 hours of OT in the schedule to avoid an average of 42 hours of OT outside the schedule? And think of the time saved trying to find volunteers to cover any absences, or the aggravation of forcing a junior employee to do a couple of double shifts when no one else volunteers.
Example #2
This example comes from a company that I designed schedules for earlier this week. They have 8 employees and need 2-person coverage at all times on a 24/7 basis. This would be simple if the 8 employees worked an average of 42 hours a week. The problem was that upper management would not approve a schedule with overtime in it. So I created three schedule options using a combination of 12-hour and 4-hour shifts. The 8 employees will have to work three 12-hour shifts and one 4-hour shift or 40 hours every week.
Although the schedules had no overtime in them, there were two 8 hour periods with only 1-person coverage instead of the desired 2-person coverage. The good news is that the organization had three supervisors to fill these open slots. The bad news is that the supervisors already had a tough time trying to be available on a 24/7 basis. When you added the two extra shifts plus relief coverage for all the other absences including their own, the supervisors were working way too many hours a week and were burned out.
I recommended that the client hire one more employee and have the 9 employees work a 12-hour schedule that averaged 42 hours a week. This would have allowed them to build a full week of relief coverage into the schedule. There would be no coverage gaps and a lot less need for OT to cover absences. I was unable to convince them that was the best solution. And believe me, I gave it my best shot. I'll probably hear from them again when the supervisors start bailing out for more attractive work environments with other employers. It's too bad that management's desire to avoid overtime in the employee's schedule is ruining the job for the supervisors. Replacing those supervisors is going to be a lot more expensive and painful.
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When organizations struggle to make ends meet, overtime often becomes a target in their budget reduction plans. Although reducing overtime may be financially prudent for most departments, it is a poor choice for those that operate around-the-clock. Here's why.
The simplest and most common way to provide 24/7 coverage is with four crews. If the crews work 40 hours a week, that provides 160 hours of coverage (4 crews * 40 hours = 160 hours). The problem is that there are 168 hours in a week (24 hours * 7 days = 168 hours).
The easiest way to close the 8-hour gap is to have the four crews work a small amount of overtime (an average of two hours per employee every week). With 8-hour shift schedules, that requires three hours extra pay for each employee, or a 7.5 percent increase. With 12-hour shift schedules, that requires four hours of additional pay for each employee, or a 10 percent increase.
If an organization is prohibited from using overtime, it must choose one of the following approaches to avoid gaps in coverage:
1. Use part-time employees. Some smaller organizations can do this, though it can be a challenge to find and retain good part-time employees. With larger groups, it can be difficult to fit part-time employees into the schedule without having one shift staffed solely with part-timers. This approach will increase costs by 5 percent. Although slightly less expensive than using overtime, it has limited applicability.
2. Use more than four crews. A schedule that uses more than four crews requires a larger headcount. If an organization does this, they usually allocate some of the extra work hours to training, relief, maintenance or special projects. Even if you ignore the cost of benefits for the additional employees (usually anywhere from 40 percent to 50 percent of the wages), this approach will increase costs by at least 25 percent.
3. Use a crewless schedule. Instead of scheduling groups of personnel (i.e. crews), you could develop a schedule for each individual employee. This approach also will require more employees than a typical four-crew schedule. The number depends on: (a) the shift length, (b) whether the shifts are rotating or fixed, and (c) the number of job categories/positions involved. This can increase costs anywhere from 7.7 percent to 50 percent if you ignore the cost of benefits. In most cases, this approach will cost more than using a four-crew schedule with built-in overtime.
Although overtime is often perceived as something to be avoided (because it requires a time-and-a-half pay premium), it is not the most expensive approach for providing 24/7 coverage. Using part-time employees to supplement four full-time crews is the least expensive solution, but this is only feasible in smaller groups. So, before banning overtime, it is important to recognize that the policy will force groups that operate around-the-clock to adopt schedules that are actually more expensive.
When organizations view overtime as an expense rather than a strategic tool, they often make three major mistakes:
They staff for peak demand. In order to have enough resources on hand to respond to short-term fluctuations in demand, they over-staff instead of using overtime. Usually this is the most expensive approach.
They sacrifice customer service. Without overtime, they are unable to respond to fluctuations in demand. In short, they sacrifice customer service to avoid overtime.
They build up an inventory of excess product to have a cushion for demand variations. The cost of this inventory must be passed on to customers.
Here are three more articles on overtime.
Reasons for using overtime. Four valid reasons for using overtime are: (1) 24/7 coverage, (2) workload fluctuations, (3) staff variations, and (4) labor market considerations.
Overtime problems. High overtime, especially when it continues for an extended time period, has several potential drawbacks: (1) an overtime-dependent workforce, (2) safety and quality issues, (3) absenteeism, and (4) lower productivity.
Correcting overtime problems. To avoid overtime problems, you should regularly monitor overtime and absences. You also should understand the workload variations and take steps to improve the accuracy of your demand forecasts. Periodically, you should review your organization's overtime distribution policies to make sure they are working properly.
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Understanding overtime There seems to be a widespread interest in reducing or eliminating overtime in shiftwork operations. I believe the two most common reasons for this are: Top management sees overtime as an unnecessary expense. They're unaware of the unique needs of groups that work 24/7 They haven't considered the total costs They fear that constituents / shareholders will see any overtime as poor fiscal management Overtime costs are out-of-control, and management is simply trying to stay within the budget. They feel compelled to do whatever they can to get rid of the overtime, assuming that this will help They haven't examined or addressed the reasons for the overtime Before jumping to conclusions about overtime, it's important to understand its two primary sources: Overtime in the schedule itself Overtime outside the schedule (to cover resource or workload variations) Let's take a closer look at each of these sources of overtime. Overtime in the Schedule Some organizations ... | |
Overtime |
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