Overtime is work performed outside the ordinary hours listed in an award, agreement or as specified in the contract of employment.
Under most Awards, overtime is defined as work performed beyond the maximum number of daily and/or weekly hours, outside the span of ordinary hours (ie. 7.00am – 7.00pm), or outside the agreed number of hours in the employment agreement.
The application of the above terms may apply to full-time, part-time and even casual employees.
When an employee works overtime, they may be entitled to an overtime rate, which is higher than the ordinary rate.
Such payments are intended to compensate employees for the inconvenience of having to work additional hours and provide reward for them doing so.
Each industry award and agreement has its own overtime rules, which dictate when overtime may be worked and when an overtime rate is applicable. Employers should be familiar with the overtime rules of their particular award, or else they could face a dispute and be forced to pay back any money owed.
The health and safety of an employee must be taken into account when asking them to work overtime. Working beyond a normal 38-hour working week may increase the risk of personal injury, fatigue and work-related stress.
It is reasonable to ask an employee to work overtime as long as the following factors are considered:
An employee can only refuse to work overtime, if having considered the relevant factors above, the request is unreasonable.
When considering whether the employee has received adequate compensation, you can look to any arrangement whereby the employee is paid a higher ordinary rate on the understanding they are required to work some overtime from time-to-time.
Whilst much of the above will be contained in the employment contract, an overtime policy is an effective way to communicate the guidelines regarding overtime to employees. This should include information that speaks to the application of overtime, how overtime requests will be made, how overtime will be allocated, as well as how overtime is to be recorded and monitored.
For advice on how to manage overtime rules in the workplace, fill out the online form to request a free consultation.