Additional work and overtime

Additional work and overtime - Alasivu - UUSI laki

What is additional work?

Additional work is defined as work performed at the employer’s request outside an employee’s normal working hours but without exceeding the statutory ceiling for regular working hours. An employee’s normal working hours can be below the statutory ceiling based on either their employment contract or a collective agreement.

Example:

  • An employee regularly works six hours per day.
  • One day, the employee works an eight-hour shift.
  • The difference between the employee’s normal working hours and the actual number of hours worked, i.e. two hours, counts as additional work.

If an employee’s working hours are not specified in their employment contract, they are deemed to have variable working hours within the meaning of section 11 of the Working Hours Act, and the employee’s consent is needed for keeping them at work beyond the hours entered for them in the shift roster. Employees with variable working hours can consent to additional work on a case-by-case basis or for a certain short period of time.

Compensation for additional work

According to the Working Hours Act, at least an amount equivalent to the wages payable for the agreed hours must be paid for any additional work performed. Employees can also be given time off in lieu of either all or some of the additional hours worked.

Any paid time off given in lieu of monetary compensation must be permitted to be taken during the employee’s regular working hours and within a period of six months from the date on which the additional work was performed, unless otherwise agreed between the employee and the employer.

Several collective agreements contain provisions on remunerating employees for additional work that differ from the provisions of the Working Hours Act.

What is overtime?

Overtime is defined as working hours exceeding the ceiling for regular working hours laid down in the Working Hours Act. However, hours worked beyond the statutory ceiling for regular working hours only count as overtime if the work is done at the employer’s request and with the employer’s approval.

On the other hand, employees cannot be ordered to work overtime against their will. Consent should ideally be sought separately for each occasion on which an employee is required to work overtime. However, employees can also consent to overtime for a certain short period of time if this is practical considering the nature of the work. These provisions are designed to ensure that employers cannot contractually require their employees to work overtime and employees cannot contractually commit themselves to working overtime whenever required.

Daily overtime means any hours worked beyond the statutory ceiling for regular daily working hours. Weekly overtime means any hours worked beyond the statutory ceiling for regular weekly working hours, excluding any hours that count as daily overtime. For example, if an employee has worked eight hours each day from Monday to Friday (a total of 40 hours) and then works 12 hours on Saturday, the first eight hours are deemed to constitute weekly overtime while the subsequent four hours are considered daily overtime and therefore do not count towards the weekly overtime figure.

In the case of employees with a period-based work schedule, overtime means any hours worked beyond their regular working hours averaged out over a two-week or three-week period. In other words, these employees’ overtime hours cannot be calculated until the end of each adjustment period.

The following is an example of how overtime hours are calculated for an employee who normally works eight hours a day and 40 hours a week, which is the statutory ceiling for regular working hours (as per section 5, subsection 1 of the Working Hours Act):

  Mon Tue Wed Thu Fri Sat Sun Total
Agreed working hours
(as per the employment contract or shift roster)
8 8 8 8 8 - - 40
Actual hours worked 12 12 12 12 12 12 12 84
Daily overtime
(in excess of eight hours)
4 4 4 4 4 4 4 28
Weekly overtime
(excluding daily overtime,
 i.e. 12-8 hours)
- - - - - 8 8 16

Accumulation of overtime in the case of employees on flexible working hours or subject to flexible working time arrangements

In the case of employees who have flexible working hours, daily overtime means any hours worked in excess of eight hours per day and weekly overtime means any hours worked on days that the employee should, according to the shift roster, have off and that take the employee’s weekly total beyond 40 hours but that are not deemed to constitute daily overtime.

In the case of employees who are subject to a flexible working time arrangement, daily overtime means any hours worked in excess of eight hours per day and weekly overtime means any hours worked during the periods of the week that should, according to the arrangement, be free time for the employee and that are not deemed to constitute daily overtime.

Employees who have flexible working hours or are subject to flexible working time arrangements need to be asked separately to perform additional work or to work overtime. Any hours that an employee works beyond their flexible working hours or the hours required under their flexible working time arrangement out of choice do not constitute daily overtime.

As a rule, overtime begins to accumulate as soon as an employee has worked eight hours in one day and carries on working at their employer’s request. If an adjustment period has been agreed for an employee on flexible working hours, the threshold between what does and what does not constitute overtime can depend on the circumstances.

Employers should seek to establish clear rules according to which additional work and overtime hours are calculated and communicate these clearly to any employees who are on flexible working hours or subject to flexible working time arrangements. It is important for both parties to know in advance when work is being performed at the employer’s request and therefore counts as overtime rather than the employee simply taking advantage of their flexible working hours or choosing to work during their free time.

Once an employee with flexible working hours has worked the maximum number of hours permitted under the scheme, they can no longer use the flexibility of the scheme to accumulate more hours. Unless otherwise agreed, the following is a good rule of thumb: any hours worked in excess of the employee’s regular working hours count as overtime if the work is performed at the employer’s request and the employer is aware of the employee’s having already worked the maximum number of hours permitted under their flexible working hours scheme.

Compensation for overtime

Employees are entitled to a higher rate of wages for any overtime hours worked. Alternatively, employees can be remunerated for overtime by giving them paid time off in lieu of either all or some of the overtime hours worked. The amount of time off in lieu is determined on the basis of the increment percentages applicable to overtime pay. Unless otherwise agreed, any paid time off given in lieu of monetary compensation must be permitted to be taken within a period of six months from the date on which the overtime hours were worked.

Collective agreements may contain provisions on remunerating employees for overtime that differ from the provisions of the Working Hours Act. It is the employer’s responsibility to take these provisions into account.

Daily and weekly overtime pay

A 50% increase on the employee’s regular wage is payable for the first two hours of daily overtime and a 100% increase for any subsequent hours.

A 50% increase on the employee’s regular wage is payable for weekly overtime.

If an employee regularly works the maximum regular working hours permitted under the Working Hours Act, daily and weekly overtime pay must be calculated separately.

Overtime pay in the context of period-based work

In respect of employees who have a period-based work schedule, any hours worked on top of the full hours required during each two-week or three-week period entitle the employee,

  • in the case of a two-week period, to a 50% increase on their regular wage for the first 12 hours of overtime and a 100% increase for any subsequent hours and,
  • in the case of a three-week period, to a 50% increase on their regular wage for the first 18 hours of overtime and a 100% increase for any subsequent hours.

The Working Hours Act also provides for calculating overtime pay in the event that an employee with a period-based work schedule does not work a full two-week or three-week period.