Overtime is a term used to describe when an employee works more than the ordinary hours they are supposed to work or at a different time than they normally work. There are d different ways that overtime payment is allowed under employment law.
Australians work a lot of overtime! A recent study showed that Australians work $71.2 billion of unpaid hours every single year, with the average worker working 42.25 rather than 38 hours per week.
When Am I Required to Pay Overtime to My Employees?
If your employee is covered by an Award, enterprise agreement or another registered agreement, then the overtime requirements and pay rates will be set out there. It will also set out the amount of time that the employee can work without having a break.
What is Reasonable Overtime?
Although some overtime is to be expected in most jobs, it is important that both employees and employers understand the overtime requirements and when employees can say no to overtime. It is also important to consider unfair dismissal and what your liabilities are if you terminate an employees’ contract for not working overtime, or your rights as an employee if you refuse to work overtime for your employer.
If an Award does not cover your employment agreement, enterprise or agreement, there are general requirements for overtime. You can request that employees work overtime, but the overtime must be “reasonable”. Several factors will affect whether the overtime will be considered reasonable, these include:
- Health and safety issues and risk associated with the overtime;
- The businesses requirements or needs at that time;
- The personal situation of the employee and if they have already notified the employer that they cannot work overtime;
- If the employee has been given notice as to the overtime being required; and
- What is expected and normal in that particular industry.
Working overtime may be required of an employee if:
- They may be paid to work the hours in exchange for a specific rate of pay; and
- They are entitled to receive a higher pay rate if they work the overtime.
Typically the maximum hours of work for a full-time employee is 38 hours, therefore, any work outside of this will be considered additional hours of work. If the employee is part-time, their hours of work will be set out in their part-time employment agreement. Some agreements and awards will also allow for the hours worked to be averaged over a greater period than a week.
It is very important to set out in your employment agreement the overtime requirements for the position and the duties and responsibilities of the role. If you have any questions or concerns about overtime for your employees, then you should speak to an employment lawyer and ensure that your employment agreements are reviewed to address the issue of working overtime.