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Thread: Overtime

  1. #1
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    Question Overtime

    I have a question about overtime, in particular who it applies to and who it doesn't. I understand that wage earners will get overtime when they work greater than their allocated hours (day/week) but when it comes to salaried at what level does it no longer apply? I know about the threshold, is that the absolute for when overtime does not apply?

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    Quote Originally Posted by peejaye View Post
    I have a question about overtime, in particular who it applies to and who it doesn't. I understand that wage earners will get overtime when they work greater than their allocated hours (day/week) but when it comes to salaried at what level does it no longer apply? I know about the threshold, is that the absolute for when overtime does not apply?
    Not sure what you mean by 'threshold' but for all award covered employees, overtime is as dictated by the particular award - note the number of initial hours at time and a half does vary from award to award, generally two or three, and each day stands alone - meaning anything in excess of 7.6 hrs is paid at overtime rates. Alternatively, any other industrial instrument (eg an EA) would include this as well.

    FYI, the basic FT work week is 38 hours, no employer can force any employee to work longer hours. It is however, generally expected that salaried staff, especially more senior roles are paid to do the job, not by the hour so some expectation of reasonable extra hours may be expected but needs to be covered in the employment contract.

    For these and other award free employees, key words are "reasonable" so where you have exceedingly busy times where people are putting in the big hours, then you should have some kind of time off in lieu system available to those staff.

    Offset clauses in employment contracts are common but where doing away with entitlement by offering a salary, be sure to do your calculations to ensure the Employee is not disadvantaged in any way. Otherwise you risk fines by Fair Work.
    Tiger

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    Tiger, what's the situation for high school teachers, where there is an implicit expectation that they will work longer than 38 hours, usually at home?

    Teachers in the State system in Victoria claim they do an average of 53 hours per week.

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    Quote Originally Posted by Moz View Post
    Tiger, what's the situation for high school teachers, where there is an implicit expectation that they will work longer than 38 hours, usually at home?

    Teachers in the State system in Victoria claim they do an average of 53 hours per week.
    You should check your relevant industrial instrument. There is an alphabetical listing of the Modern Awards which cover Australia nationally on the Fair Work website with a couple of different awards relating to teachers, from memory. Alternatively, it might be there is an Enterprise Agreement in place for your organization so you should check that.
    Tiger

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    Quote Originally Posted by Tiger View Post
    Not sure what you mean by 'threshold' but for all award covered employees, overtime is as dictated by the particular award - note the number of initial hours at time and a half does vary from award to award, generally two or three, and each day stands alone - meaning anything in excess of 7.6 hrs is paid at overtime rates. Alternatively, any other industrial instrument (eg an EA) would include this as well.

    FYI, the basic FT work week is 38 hours, no employer can force any employee to work longer hours. It is however, generally expected that salaried staff, especially more senior roles are paid to do the job, not by the hour so some expectation of reasonable extra hours may be expected but needs to be covered in the employment contract.

    For these and other award free employees, key words are "reasonable" so where you have exceedingly busy times where people are putting in the big hours, then you should have some kind of time off in lieu system available to those staff.

    Offset clauses in employment contracts are common but where doing away with entitlement by offering a salary, be sure to do your calculations to ensure the Employee is not disadvantaged in any way. Otherwise you risk fines by Fair Work.
    Tiger
    Hi Tiger,

    Thanks for you response. Most of what you wrote I understand. I guess the question I am really trying to get answered is "is there a threshold salary at which overtime no longer applies?" I did read something on the FairWork site with a number like $138,200 being total compensation and then that begs the question what does that actually mean because that can be interpreted in different way i.e. what is included and whats not. There was also a mention of an actual monetary figure of around (and don't quote me on this) $43,000 minimum.

    Cheers, peejaye

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    Hi peejaye,
    That figure of $138,200 looks like the unfair dismissal threshold. Can you please give us the link to the Fairwork page where you have seen a threshold relating to overtime.

    Generally speaking, the only people who tend to eligible for overtime, are those who are paid an hourly rate.

  7. #7

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    i have a question really
    Recently my employer indicated that he had been advised by a HR firm that salary staff can expect to do up to 16 hours overtime a week without expecting further remuneration or time in lieu I questioned this as there is no clear definition of reasonable hours, and it seems quite high expectation.
    this also applies to the administration staff as well as Managers.
    Has anyone else been advised for this number of hours or have this expectation of their staff.
    Last edited by Fabsteel; 03-04-2017 at 04:16 PM.

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    Quote Originally Posted by Moz View Post
    Tiger, what's the situation for high school teachers, where there is an implicit expectation that they will work longer than 38 hours, usually at home?

    Teachers in the State system in Victoria claim they do an average of 53 hours per week.
    But don't they only work at the school for 40 weeks a year? With approx. 12 weeks holidays!

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    Quote Originally Posted by Fabsteel View Post
    i have a question really
    Recently my employer indicated that he had been advised by a HR firm that salary staff can expect to do up to 16 hours overtime a week without expecting further remuneration or time in lieu I questioned this as there is no clear definition of reasonable hours, and it seems quite high expectation.
    this also applies to the administration staff as well as Managers.
    Has anyone else been advised for this number of hours or have this expectation of their staff.
    I have always used the following rational (I have simplified the numbers for ease of explanation):

    Minimum wage = $40,000pa for 38 hours work per week X 52 weeks = 1,976 hours = $20.25/hr.

    You currently pay employee, $42,000pa for 38 hours work per week (ie $2,000pa above the min.) = $21.25
    If your employee works an additional 10 hrs every week they have worked an additional 520 hours, giving a total 2,496 hours for the year. Their effective hourly rate would be $16.85/hr which is well below the minimum.

    You have another employee who is on $85,000pa. Arguably, when you factor in the additional hours worked they are still being paid above the minimum hourly rate for these additional hours (notwithstanding the "reasonableness" of these additional 10 hours every week).

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    Quote Originally Posted by bullswool View Post
    You have another employee who is on $85,000pa. Arguably, when you factor in the additional hours worked they are still being paid above the minimum hourly rate for these additional hours (notwithstanding the "reasonableness" of these additional 10 hours every week).
    Using this approach someone earning $180k per year could be expected to work 24 hours per day, seven days per week!

    An annual salary is commensurate with a particular set of duties, responsibility, and qualifications and experience required to do the job, in a normal working week.

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    Agreed Moz.
    I did try and convey my apprehension in providing definitive advise by saying Arguably and Notwithstanding the reasonableness... - but maybe language was not strong enough. Yes, in your scenario, asking somebody to work 24 per day is not reasonable. (It wasn't my teacher's-only-working-40-weeks-per-year remake that touched a nerve? )

    I guess I trying to provide advise and guidance for OP & Fabsteel with numbers. I'm more of a numbers person and understand when it's break down in this way.

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    I don't generally respond, just read - thanks guys its always great to reaffirm your understanding of things.
    Overtime is quite a bugbear for a lot of companies and HR - Most places people want to know what reasonable additional hours are - it is written nowhere what reasonable additional hours are based on - the only time I found anything and this was several years ago was based on 457 employees and it was 2 hours per week (please don't ask me to find the link again).

    The general rule that I follow is based on your salary ie: 40-80k - 2 hours per week, then ATOIL - there are no hard and fast rules as what is reasonable for one company/industry may not be for another and yes I work in excess but don't claim as I feel its part of the role.

    Maybe consult with the staff to see what they would deem reasonable additional hours.

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    bullswool,
    Regardless of the "numbers", you can't just ignore the law because you think it is unjust because some people get more holiday or get paid more than someone else, and therefore require them to work longer hours as and when you please, so long as it works out that they are still being paid the minimum wage.

    A typical working week in Australia has long been regarded as 37.5 - 40 hours, and now the NES says it is 38, so no one expects to have to work 50 hours per week, or more, with little or no choice in the matter, regardless of whether they are being paid extra for it.

    The same goes for teachers, or other workers such as emergency services who work on "n days on, n days off" rosters, or people who get regular RDOs, in every case there are expectations in terms of reasonable hours, and that's what they signed up for. They accepted the job and the salary on that basis.

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    Looks like this topic has strayed from the point.... many views.... many scenarios.... much detail in each and that is the reality of work I'm afraid. As far as guessing/forecasting additional hours on an annual basis however, you'd be using 48, not 52, weeks or even a bit less since time out of the year, annual leave, sickness and public holidays reduces actual time worked. Detailed analysis of the business, number of employees ratio to work required etc needs to be done to forecast what may be fairly worked by individuals. Then the business needs to work out whether it might actually be more cost effective to put on more staff which I would suggest is the case if any employer is expecting employees work 48 hrs/week!! If extra hours are problematic, ie no particular pattern, then pay the O/T, or have a TIL policy in place OR pay a quarterly bonus. No employee earning less than $90 (in my opinion) should be expected to work ridiculous hours and not be compensated. That of course, assumes said employees are working to maximum efficiency.

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    Tiger, in an earlier post you suggested checking the award for teachers. The Victorian Government Schools Agreement 2013 states "Ordinary hours of duty for full-time employees are 76 hours a fortnight."

    The agreement provides for time in lieu for both education support class employees and teachers in the event that they are required to work more than 38 hours per week.

    In the case of "education support class employees" it also says;

    "a) The Employer may require an education support class employee to work in excess of the employee’s
    normal hours of duty where such work is unavoidable and reasonable notice is provided. All work
    required in excess of an education support class employee’s normal weekly hours of duty must be
    documented by the Employer."

    "(b) An education support class employee who is directed to work under sub clause (a) may request not to
    do so where this would unreasonably affect personal or family commitments and the Employer will not
    unreasonably refuse such a request."

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