Managing overtime before it turns into a payroll dispute

Every month-end, somewhere, a supervisor and an employee are arguing about overtime. The employee says they stayed until 9pm three times. The supervisor says nobody asked them to. Payroll is stuck in the middle with a spreadsheet and a deadline.

Overtime disputes are almost always caused by the same thing: nobody agreed, before payroll closed, which extra hours count. Here’s how to fix that.

Start with written rules

Your overtime policy should answer five questions:

1. What counts as overtime? Usually hours beyond the employee’s scheduled hours, or beyond a weekly limit. In Ghana, normal hours are capped at eight a day or 40 a week under the Labour Act.
2. Who can authorise it? Typically the supervisor, with a second approval for large amounts.
3. What are the rates? For example, 1.5 times on weekdays and 2 times on rest days and public holidays. In Ghana, the Labour Act says you can’t require overtime unless you’ve fixed overtime rates.
4. Do weekends and holidays count? Decide whether any work on a non-working day or public holiday is automatically overtime.
5. Who is eligible? Senior staff on fixed salaries are often excluded. Say so.

Two ways to approve overtime

Before it’s worked (pre-approval). The supervisor asks the employee to stay, or the employee requests it, and it’s approved in advance. This is the cleanest option: nobody works overtime they won’t be paid for, and the cost is known.

After it’s worked (based on attendance). The attendance system records the extra hours, and a supervisor confirms them before payroll. This suits operations where overtime can’t be planned, such as a delivery that arrives late or a patient who needs care.

Most organisations use both: pre-approval as the default, and after-the-fact confirmation for genuine emergencies. What matters is that every hour gets a yes or no before payroll closes.

Common mistakes

• Paying overtime from a list someone typed up. Use the attendance record. If the hours aren’t in it, ask why.
• Approving in bulk at month end. By then nobody remembers whether Tuesday’s extra two hours were needed.
• Ignoring patterns. One team with overtime every week usually means a staffing problem, not a dedication problem.
• Forgetting the tax rules. In Ghana, eligible junior staff have overtime taxed at special rates. Payroll needs to know which employees qualify.

Questions we often hear

Can we refuse to pay overtime that wasn’t approved?

That depends on your contracts and local law, so take advice before you rely on it. In practice, refusing payment for hours someone genuinely worked tends to cause bigger problems than it solves. It’s far better to make approval easy and quick, and to deal with repeated unapproved overtime as a conduct issue.

Should salaried managers get overtime?

Many organisations exclude managers and senior staff on fixed salaries and compensate long hours in other ways, such as time off in lieu. If you do, say so in their contracts so there’s no argument later.

How do we stop overtime becoming a habit?

Look at it team by team, every month. Regular overtime in the same team usually means the team is short-staffed or the schedule doesn’t match the workload. Fixing the roster is cheaper than paying time and a half forever.

How Eban handles overtime

In Eban, employees can request overtime from the mobile app, and it goes through one or two approval levels, just like leave, to the recommender and approver set for that employee. Extra hours can also come straight from attendance: Eban works out time beyond the scheduled hours and pays it at the overtime rate set on the work schedule, with separate rates for holidays and non-working days. You choose whether any work on a holiday or non-working day counts as overtime. Approved overtime flows into the payroll run, so payroll works from the same numbers the supervisor saw.