Additional work and overtime

Additional work and overtime - Alasivu - UUSI laki

Additional work refers to work in between agreed working hours and the maximum number of regular working hours specified in the Working Hours Act. Overtime is defined as work exceeding the maximum number of regular working hours laid down in the Working Hours Act. Performing additional work and overtime work always requires the employer’s initiative and approval. Similarly, the employer must have the employee’s consent for additional and overtime work.

Consent as a prerequisite for assigning additional and overtime work

Primarily, the work exceeding agreed or regular working hours performed voluntarily at the employee’s own initiative is not compensated as additional or overtime work. Depending on conditions, additional or overtime work can be performed, in exceptional cases, based on the employer’s silent consent. In this case, a prerequisite for additional or overtime work is that there is mutual understanding on performing such work. In work with flexible hours, additional and overtime work always requires that the employer specifically orders such work to be performed.

The employee’s consent is always required for performing additional and overtime work. In principle, the employee must consent to additional or overtime work before such work is started.

Assigning an employee to perform additional work requires an oral or written consent from the employee. This consent can be given on a case-by-case basis, for a fixed time, or until further notice. Additional work can be agreed on already when signing the employment contract, in which case the employee commits to additional work if the employer so instructs. Even though additional work has been agreed on in the employment contract, an employee is entitled to refuse additional work on days which are entered as free time on the work shift schedule, provided they have a justifiable personal reason. The following are acceptable as justifiable personal reasons: studying for or participating in an exam, child care arrangements or other arrangements of caring for family members, health reasons, personal festive days or those of close relatives, funerals, or travels that cannot be cancelled without additional costs. A justifiable personal reason can also be the fact that a part-time employee has agreed to a work shift for another employer. 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 (in Finnish), and the employee’s consent is needed for keeping them at work beyond the hours entered for them in the work shift schedule. Employees with variable working hours can consent to additional work on a case-by-case basis or for a certain short period of time.

The specific consent of employees is required each time overtime is required. However, the consent to overtime can be given for a certain short period of time if this is practical considering the nature of the work. When giving the consent, the employee must know the period of time for which the consent is given. It could mean brief or occasional peak periods or workforce needs due to sudden substitutions. Because the consent to overtime is free in form, it can be given orally, in writing, or silently. In order for the silent consent to be valid, the employee must know that the work to be performed is overtime.

Performing overtime is always based on the employee’s voluntariness. 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.

What is additional work?

Additional work is the work performed at the employer’s request outside an employee’s regular working hours but without exceeding the statutory maximum number 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.

The accrual of additional work depends on how the employee’s regular working hours are organised. Additional work is accrued when work is performed at the employer’s initiative in addition to agreed working hours but without exceeding the regular working hours specified in the Working Hours Act. An employee’s regular working hours can be below the statutory maximum number based on either their employment contract or a collective agreement. Normally, additional work is accrued when a part-time employee performs work that exceeds their agreed working hours.

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.

Compensation for additional work

Additional work is compensated based on the pay for regular working hours, unless a separate agreement has been made for a higher rate of wages. Collective agreements might contain provisions on compensation for additional work that differ from the provisions of the Working Hours Act. In addition, the higher rate of wages can be based on the employment contract or separate practices at the workplace.

The employer and the employee can agree to convert the compensation for additional work into time off during regular working hours. The compensation can be converted to time off either in full or in part. Unless otherwise agreed between the employer and the employee, the time off must be given within six months from the date on which the additional work was performed. The date or dates for the time off should be agreed between the employer and the employee. If an agreement cannot be reached, the employer has the right to determine the date or dates for the time off, unless the employee demands the compensation as pay. The employer and the employee can also agree to transfer the time off into the working hours account or to combine it with the carried-over holiday within the meaning of the Annual Holiday 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.

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.

When observing general working hours, daily overtime is defined as work in excess of eight hours a day. Weekly overtime is defined as work in excess of 40 hours a week and that is not counted 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.

When observing average regular working hours, daily overtime is defined as work in excess of the regular daily work recorded in the work shift schedule. Weekly overtime is defined as work in excess of regular working hours that is not counted as daily overtime.

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. In case of a three-week adjustment period, for example, overtime is accrued when the working hours during the period exceed 120 hours.

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):

Type of hours	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. 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. 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. The higher rate of wages depends on whether it is a daily or weekly overtime or overtime in the context of period-based work, as well as on the amount of the overtime hours.

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. If, for example, the compensation for one overtime hour is the regular wage plus 50%, the equivalent as time off is 1,5 hours.

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, which means a maximum of eight hours a day and 40 hours a week, daily and weekly overtime pay must be compensated separately.

Overtime pay in the context of period-based work

In period-based work, overtime is not separated into daily and weekly overtime. Due to the nature of period-based work, the overtime accrued can be determined only after the two- or three-week period observed has ended, or similarly, after three two-week periods or two three-week periods have ended.

Any hours worked on top of the full hours required during each uninterrupted period entitle the employee to have the following compensations:

When observing a two-week period during which regular working hours are a maximum of 80 hours: a 50% increase on their regular wage for the first 12 hours of overtime and a 100% increase for any subsequent hours
When observing a three-week period during which regular working hours are a maximum of 120 hours: a 50 % increase on their regular wage for the first 18 hours of overtime and a 100% increase for any subsequent hours.

If the period-work is interrupted because the employee’s employment relationship has ended or because the employee has not been able to work due to a holiday, sickness or other acceptable cause, the hours exceeding the average working hours of eight hours during the interrupted period are calculated. For this number of hours, the compensation for the first two average overtime hours is a 50 % increase on the regular wage and a 100% increase for any subsequent hours.

Example:

	Mon	Tue	Wed	Thu	Fri	Sat	Sun	Average working hours =
Regular working hours	10	8	10	9	8	-	-	9 hours / day

The period is interrupted after the first week on Friday due to a valid reason.

9 hours – 8 hours = 1 hour overtime / day

1 hours x 5 = 5 hours overtime / interrupted period

Because the daily overtime for the interrupted period does not exceed two hours, the compensation for the overtime is a 50% increase on the regular wage.