Basics of Uncompensated Overtime - “Forty-Hour” Versus “Total Time Approach”
Numerous companies require their employees to record a maximum of eight hours per day or forty hours per week. Such “forty hour” companies have employees charge only the first 8 hours to jobs or indirect functions while others permit exempt employees to select where to assign their 8 hours. Alternatively, “total time” companies have their employee identify all hours worked and assign these hours to all cost objectives (e.g. contracts, tasks, etc.) or indirect functions.
Responding to the first “gaming” potential of allocating more costs to projects than employees are paid, many government bodies have call for mandatory total time reporting. Responding to the second “gaming” potential of evaluating offerors hourly rates using different UOT computations that may result in overworking employees and hence risking performance risk, other government bodies have called for mandatory eight recording or, at least, explicitly divulging UOT practices.
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