Overtime is work that an employee does outside the regular or normal hours that are specified in the employment contract.
Overtime is typically required towards the end of a project or if there is a sudden shortage of staff, for example if someone called in sick at the last minute. Rates for this kind of work is usually higher than the ordinary rate.
When does overtime kick in?
Ordinary hours are an employee’s regular working hours. Usually ordinary hours are around 40 hours per week. Overtime rates typically apply when an employee works beyond these ordinary hours.
The specific rate is determined by the law. Higher payments aim to compensate employees for the inconvenience of working extra hours and to provide a reward for extra effort. Companies can give employees higher rates than what’s required by law.
What are the rules?
Employees can be required to work overtime, but they can refuse if the request is unreasonable. Employers should always take into account factors such as the employee’s health and safety, personal situation, workplace needs, reasonable compensation for extra hours, prior agreements, and industry norms.
Different industries and employment agreements have their own set of rules regarding overtime. All employers are responsible for familiarizing themselves with the specific rules in their sector.
Time off instead of overtime pay
Some contracts or agreements allow employees to opt for paid time off instead of receiving overtime pay. This arrangement, commonly referred to as ‘time in lieu’ or ‘time off in lieu,’ must be established in writing with the employee’s consent and should comply with industry rules and general rules and regulations.
To manage the employees time in lieu or their overtime pay, they should fill out a timesheet which shows all the hours they’ve worked. The timesheet can be filled out in an online application or in Word, Excel, or similar.