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What is overtime - definition and legal framework?
The term overtime covers working hours that go beyond regular working hours. Unlike Mehrarbeit (excess hours), however, overtime still stays within the statutory framework of 8 hours and a maximum of 48 hours per week.
Under German employment law, overtime has to be reduced within 6 months or 24 weeks.
Read more here about overtime and how Mehrarbeit differs from it.
Reducing overtime - rights and obligations for employers and employees
Who decides how overtime is reduced?
Overtime builds up whenever an employee works beyond the working hours agreed in their contract. Those hours have to be reduced. How and when overtime is reduced or compensated is set out either in the employment contract or in the collective agreement. Where no clear rules on reducing overtime are laid down there, the employer exercises its right to give instructions. In other words, it decides how and when the hours have to be compensated.
How can you reduce overtime?
In principle, overtime can be reduced in two ways: through time off or through payment.
Payment
The employer can decide to pay overtime out. In that case it has to know the employee's hourly rate. Where this is not set out in the contract, the following calculation applies.
To work out the employee's hourly rate, you need the gross salary and the contractual number of weekly hours.
There are two ways to calculate overtime pay:
1. The gross salary is multiplied by 3 and divided by 13 (weeks). The result is then divided by the number of weekly hours. The result is the hourly rate.
Example:
Gross salary: 4,000
Weekly working hours: 38
4,000 x 3 / 13 / 38 = 24.3
2. The gross salary is multiplied by 4.33. This factor stands for the average number of weeks per month. The product is divided by the number of weekly hours.
Example:
4,000 / 4.33 / 38 = 24.3
Time off
Alternatively, overtime can also be compensated with time off. This solution applies above all where the overtime takes you over the statutory limit of 8 hours a day. Under § 3 of the Arbeitszeitgesetz (ArbZG, the German Working Hours Act), this compensation has to happen within 24 weeks or six calendar months.
You can read more about comp time here.
Many employment contracts contain sentences such as "10 hours of overtime are covered by your salary". What that means is that these hours are included in the salary and are not paid or compensated on top. Legally, though, there are a number of things to watch out for here. You can read more about that here.
Can the employer refuse to let overtime be reduced?
In principle, as long as nothing is set out in the employment contract or the collective agreement, the employer has the right to give instructions. So it may determine when overtime is reduced. It should be noted, though, that the employer really ought to accommodate the employee's wishes. Even so, it can refuse to let overtime be reduced. It should take care to keep within the statutory framework for overtime.
Practical tips: reducing overtime made easy
With clockin you can make overtime management in your business simple, transparent and efficient. The app gives you and your team everything you need to manage working hours and overtime without the stress:
- Record working hours stress-free via the app, a tablet terminal or the browser
- Recorded working hours are transparently visible in the app for employers and employees
- Overtime is calculated and displayed automatically
With clockin you have the perfect tool not just for managing overtime, but for reducing it efficiently and fairly - all in a user-friendly, digital environment.
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