It’s a common situation: your business hits a busy patch, and you suddenly need your employees to put in a few extra hours to get the work done. That’s overtime, right? Yes, but unfortunately, overtime isn’t as simple as slipping your employees a few extra dollars to work late.
What’s the definition of overtime?
Overtime is work performed by an employee outside of their ordinary hours. It’s defined as any work done:
- Beyond your employee’s maximum daily or weekly ordinary hours of work
- Outside a part-time employee’s agreed number of hours
- Outside the spread of ordinary hours
What are ordinary hours?
Ordinary hours are set out in an award, enterprise agreement, other registered agreement or employment contract.
Are ordinary hours different to the spread of hours?
Yes: the spread of hours is the times of the day ordinary hours can be worked (for example, between 7am – 7pm).
Can I just ask my employee to work overtime?
Yes, but the Fair Work Ombudsman makes it clear that employers can only request that an employee works reasonable overtime.
Okay then – what’s considered reasonable overtime?
“Reasonable” takes into account the following factors:
- Risk to health and safety from working the extra hours
- The employee’s personal situation, including their family responsibilities
- The needs of the workplace
Can my employee refuse overtime?
Yes. Employees can refuse to work overtime that unreasonably exceeds the maximum weekly hours.
Do I need to consider health and safety issues?
It’s important that health and safety issues, like fatigue, are considered if an employee has to work overtime. For more information on the health and safety implications of an employee working long hours, visit the Safe Work Australia website.
How is overtime calculated?
Overtime payments are based on a multiple of an employee’s ordinary time hourly rate of pay. Modern awards that provide for overtime require overtime to be paid:
- At 150% (time and a half) of an employee’s ordinary time hourly rate for the first two or three hours of overtime worked.
- At 200% (double time) of an employee’s ordinary time hourly rate after the two or three hours of overtime worked.
What about weekends and public holidays?
Some modern awards provide different overtime payment arrangements for:
Shift workers.
- Working overtime on Saturday.
- Working overtime on Sunday.
- Working overtime on a public holiday.
As you can see, navigating overtime can be tricky! If you need a little help ensuring you request and implement overtime correctly, please get in touch with the HR Dept.