Overtime – should I pay my employee?

In terms of the Basic Conditions of Employment Act (BCEA), an employee may only work overtime if there is such an agreement between the employer and employee. This agreement is only valid for a period of 12 months and must be renewed annually.

If an employee earns in excess of the income threshold, which is currently set at R254 371.67 per annum (R21 197.63 per month) effective as of 1 April 2024, the overtime clause in the BCEA, as detailed below, does not apply. This amount includes remuneration before any deductions (e.g. income tax, pension, medical aid, etc.), but excludes contributions by the employer in respect of pension and medical aid. Transport allowance, performance awards (bonuses) and payment for overtime worked will also not be included. If the employee therefore earns in excess of the income threshold, the parties must agree what the payment or arrangement for overtime will be, if any.

Overtime also does not apply to the following persons:

• Senior management
• Salespersons who travel to the premises of customers and who regulate their own working hours
• Employees who work less than 24 hours per month

Do I pay overtime after 45 hours worked?

Normal working hours may not exceed 45 hours per week and any hours worked in excess of the agreed normal working hours are considered to be overtime. Overtime must be calculated daily:

• If the employee usually works five days a week, the hours worked in excess of nine hours a day are considered overtime.
• If the employee usually works six days a week, the hours worked in excess of eight hours a day are considered overtime.

What are the maximum hours of overtime?

• Ten hours per week; and
• Three hours a day.

An employee may not work more than 12 hours on any day. This includes overtime. A written agreement may increase the maximum hours of overtime per week to 15 hours per week, but this may not be applied for more than two months in any 12 month period.

How much should I pay my employee?

The employer must pay one and a half times the employee’s normal rate for each hour of overtime worked. However, the parties may agree that the employer:

• Pay the normal wage for overtime worked and exempt the employee for 30 minutes with full pay for each hour of overtime worked; or
• Exempt the employee for 90 minutes with full pay for each hour of overtime worked.

When do I have to grant this time off?

This time off must be granted within one month of the employee working the overtime. There is an option to extend this agreement to 12 months if it is so agreed upon in writing between the parties.

Employers must ensure that overtime is only worked by agreement, so that employees do not submit unnecessary claims for overtime worked. As there are various sectors and applicable legislation, it is essential for an employer to be aware at all times under which sector and legislation they are classified. In doing this, employment contracts are drawn up with correct clauses to protect the employer. The employee is then also aware of what is expected of him/her.

This article applies to overtime for employers and employees who fall under the scope of the Basic Conditions of Employment Act (BCEA). To ensure that you as an employer are aware of the correct overtime applicable to your sector, contact the LWO on 086 110 1828.

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