If there is no collective agreement, you need to make sure that the right to overtime pay is written into your employment contract. There may also be a company policy with rules on overtime pay.
Overtime is defined as working hours that exceed regular working hours. Many collective agreements stipulate that the work must be ordered in advance or approved afterwards for overtime to be paid.
Overtime is compensated either in cash (overtime pay) or in time off (compensatory leave). The amount of overtime compensation may vary in different collective agreements, company policies and employment contracts.
Contract away your overtime pay?
It is possible to contract away the right to overtime pay. In this case, it is important that it is done on terms that benefit both you as an employee and the employer. Agreeing to waive overtime is mainly relevant for managers and employees who have great opportunities to influence the organization of their working hours.
If you agree to waive your right to overtime pay, you are still expected to work normal working hours. Overtime should only be considered if something unforeseen happens in the business. If the business requires employees to work overtime on a regular basis, there is something wrong in the organization, which the employer needs to correct.
The conditions for agreeing to waive overtime pay and the notice periods for the agreement are set out in your collective agreement. If you don't have a collective agreement, the conditions are set out in your employment contract or company policy.
If you are going to contract away your overtime pay, remember to:
- Make an accurate calculation of how much overtime you work.
- Calculate how much the overtime is worth in money. As you can see from the table below, it is often worth more than you think.
- If you negotiate overtime pay, you will usually get three or five extra days of vacation and/or a higher salary, according to the collective agreement.
- Try to get compensatory time on an hourly basis, i.e. one hour of overtime is compensated by one hour of leave.
- Make sure you get special compensation, in time and/or money, for working at weekends.
- Be aware that the contract can be terminated or renegotiated. Include review dates if they are not in the collective agreement.
- Start with a fixed-term agreement, for example for one year, to be able to renegotiate the terms if the amount of overtime changes.
Rules for overtime
If you agree to waive your overtime pay, the rules of the Working Time Act on how much you can work per day, per week and per year still apply, unless otherwise specified in your collective agreement.
This is the amount of overtime allowed under the Working Hours Act:
- When there is a special need for increased working hours, overtime may be worked for a maximum of 48 hours per employee over a period of four weeks or 50 hours in a calendar month, but not more than 200 hours in a calendar year (general overtime).
- Overtime in addition to general overtime may be worked up to a maximum of 150 hours per employee in a calendar year if there are special reasons for it and the situation cannot be resolved in any other reasonable way (extra overtime).
- Extra overtime and general overtime together may not exceed 48 hours per worker in a period of four weeks or 50 hours in a calendar month.