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28 January 2019

Everything you need to know about overtime

Definition of overtime work

Overtime work is defined as performing duties specified in the work contract beyond the limits of the ordinary working hours under the Working Environment Act (AML) regulations.

Remember that overtime should not be confused with extra work, which is defined as work beyond the time agreed with an employer, but not beyond limits of the ordinary working hours. That said, the difference between overtime and extra work is that the latter must necessarily be contained within the ordinary working hours.

 

Total working hours = ordinary working hours + extra work (if agreed) + overtime

 

There is a possibility of an agreement between employer and employee about working outside of work time agreed in the contract (extra work).

Overtime details: when it applies, hour limits

The most important aspect to remember by the employee is that: overtime cannot be imposed by an employer as a fixed, regular and normal scheme of work. There must be a special need for applying overtime and there must be a consensus regarding overtime accounting.

As the AML suggests, special need for overtime work can require situations such as:

  • the unexpected shortage of staff that may interfere with daily operations,
  • the risk of damage to plants, machinery or products,
  • strong work pressure due to independent factors,
  • situational lack of work force with special expertise.

As allowed by the law, in an ordinary work situation, the overtime must be limited to 10 hours per 7 days and a maximum of 25 hours for 4 consecutive weeks. This equals to 200 hours within a 52-week period. All this assuming that the working time does not exceed 13 hours within 24 hours workday.

It is also possible to set additional overtime hours assuming the written consent of the employees themselves. The time allowed for overtime increases multiplies to possible limits of:

  • 20 hours in 7 days,
  • 50 hours in 4 consecutive weeks,
  • 300 hours in 52 weeks.

In that case, total working hours cannot exceed 69 hours in any single week.

Customary forms of payments

Generally, the amount of overtime pay is the result of an agreement between the parties of the contract. As stated on AML, the employee is entitled to a supplement of at least 40 percent of the agreed hourly wage. A lower percentage agreement is not allowed regardless of the contractual agreements. In business practice, parties can settle with a fixed amount remuneration for overtime work in hour by hour method, but the value must be equal or surplus to said 40 percent. As opposed to overtime, extra work is usually paid as a normal pay.

Exceptions

Although rules on working hours and overtime are universal and theoretically should apply to every employee, there are exceptions regarding those employees, whose position is labeled as particularly independent or managerial. Such employees have senior and responsible positions, who prioritize their tasks themselves. We covered that topic in this article.

The shape of the exemption for those particular types of positions is always a subject of arrangements between employer and employee.

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