Idle Time, Overtime, Casual Worker and Out Worker

Idle Time

Idle Time is the time for which a worker is paid but during which no productive work is done — the gap between the time a worker was present (Time Kept) and the time actually booked to productive jobs (Time Booked).

Idle Time = Time Kept (Total Attendance) − Time Booked (to Productive Jobs)

Idle time is classified by cause into two categories, treated very differently in the cost accounts:

• Normal Idle Time — unavoidable, inherent to normal factory operation (e.g. tea breaks, tool/machine-setting time between jobs, the walk from the gate to the workstation, machine start-up/shut-down time). Because it cannot realistically be eliminated, its cost is absorbed as part of normal production cost — usually included in Factory Overhead, or built into the wage rate charged to jobs.
• Abnormal Idle Time — avoidable, arising from an unusual event (e.g. machine breakdown, power failure, strike/lock-out, material shortage, faulty planning). Because it represents a genuine loss, its cost is excluded from cost of production and charged directly to the Costing Profit and Loss Account.

Overtime

Overtime is the time a worker works beyond normal working hours. Under labour law, overtime is usually paid at a premium rate — commonly twice the normal rate (the normal rate plus an equal 'overtime premium').

Overtime Wages = Overtime Hours × Overtime Rate; where the extra amount over the normal rate is the Overtime Premium.

Treatment of overtime premium in cost accounts:

• If overtime is worked at a customer's specific request (to rush their order) → the premium is charged directly to that job.
• If overtime is due to a general shortage of capacity / to meet overall production targets → the premium is treated as Factory Overhead and spread over all jobs.
• If overtime is due to an abnormal cause (e.g. making up for time lost to a breakdown) → the premium is charged to the Costing Profit and Loss Account as a loss.

Casual Worker

A Casual Worker is a worker engaged only occasionally, for a short period, to meet a temporary or seasonal rise in work — not part of the permanent (regular) workforce. Because casual workers can be a route for fraud (e.g. fictitious 'ghost' names being paid), their appointment and wage payment should be tightly controlled and properly authorised.

Out Worker

An Out Worker is a worker who does the organisation's work away from the factory premises — either at the worker's own home, or at a site/customer's premises. Two kinds arise:

• Workers who take materials home and return finished work (home-workers) — here strict control over materials issued and finished work received back is essential to prevent loss/pilferage. …