Overtime
It is hard to imagine an occupation that does not involve overtime. The question therefore arises as to how overtime is regulated by law, in particular by labor law, and whether the employee can be obliged to work overtime at all.
Overview
Is there a legal obligation to work overtime?
How much overtime is allowed?
Overtime compensation
Overtime after termination
Do overtime hours have to be reimbursed at all?
Must overtime be paid after termination?
Scope of remuneration for overtime after termination of employment
Working off overtime in the event of termination without notice?
Is it possible for the employer to bridge the notice period with overtime?
What happens to the overtime hours in the event of termination without notice?
Overtime in termination agreement
Is there a legal obligation to work overtime?
As a general rule, an employee is only obliged to work overtime if the relevant provisions are included in an employment contract, a company agreement or a collective agreement and thus oblige the employee to work overtime. If these regulations are not included, the employee is allowed to refuse to work overtime.
But in any case, labor law allows the employer to oblige the employee to work overtime in a certain exceptional situation. These are emergencies and disasters, such as fires and floods. In such cases, the employer may insist on overtime.
Therefore, if there is a contractual obligation to work overtime, this cannot be rejected without objection. However, certain requirements also apply here, which must first be met.
If the company has a works council, its approval for the overtime is required for the first time (§ 87 BetrVG). In addition, according to the law, permission for work on Sundays and public holidays in industries in which work is normally only performed on weekdays is only granted in special exceptional cases (§§ 9, 10 ArbZG).
How much overtime is allowed?
The maximum permitted working hours for employees are determined by the Working Hours Act. According to this, an employee may work eight hours on Mondays to Saturdays. This results in a maximum working time of 48 hours per week.
This means that in a regular 40-hour week, up to eight hours of overtime would be quite possible. The extension to up to 10 hours of work per day is compatible with the Labor Act under certain conditions. However, these additional hours must be compensated in the form of free time within a period of six months (§ 3 ArbZG).
Other compensation periods may be established only in the case of a collective agreement.
Caution is required here, as employees under the age of 18, such as apprentices, are excluded from this exception. They are generally not allowed to work more than 40 hours per week.
Overtime compensation
There is no detailed statutory regulation on the remuneration of overtime. Whether and how the additional work is to be remunerated or compensated by time off is usually regulated by agreements in the employment contract or collective bargaining agreement.
Many employers regulate the compensation of overtime through so-called flexitime and working time accounts. If such a regulation is not included in the employment or collective agreement, this does not immediately mean that the right to payment for overtime is not applicable. The decisive criterion for this is the compensation expectation.
This raises the question of whether it can be tacitly expected that the employee will be compensated for overtime when performing the work. This is true for many jobs. However, this is usually not the case for high-paying activities, as some labor and collective agreements also provide for overtime bonuses.
This means that executives and professions of a "higher nature" cannot usually demand payment for overtime. Lawyers and doctors can be cited as examples of this (Section 18 (1) no. 1 ArbZG).
Overtime after termination
It often happens that the employee still has open overtime after termination and would like to have this compensated in free time
or money. But how is this regulated in concrete terms?
Do overtime hours have to be reimbursed at all?
To do this, it is first necessary to clarify whether the employee is entitled to anything at all for overtime worked, regardless of whether the compensation is in the form of money or time off. In most cases, this turns out to be relatively unproblematic, as most employment and collective agreements contain a corresponding clause.
In the absence of such a clause, it must be determined whether the employee could expect remuneration. If the employer has always paid overtime up to now, this is a clear sign that there is still an obligation to do so.
However, there are also cases where overtime is not reimbursed. Such a case is in the case of executives or professions of a "higher nature", such as doctors and lawyers. This is because they often cannot demand payment for overtime (Section 18 (1) no. 1 ArbZG).
Young people are also not permitted to work overtime (§ 8 JarbSchG).
However, should they exceptionally work overtime in an emergency because there are no adult employees in the company, the overtime worked must be compensated for within three weeks by reducing their working hours (Section 21 JarbSchG). Expectant and nursing mothers are also protected by the Maternity Protection Act. They are also not permitted to work overtime (§ 4 MuSchG).
The employee should also be able to provide proof that he or she has actually worked the specified number of hours and that there is an order or at least acquiescence from the employer.
For example, the completion of a project after working hours does not constitute acquiescence, unless this has been agreed with the employer in advance. However, if such a project is customary in the company and overtime of this type is also usually paid, then acquiescence by the employer can be assumed.
Must overtime be paid after termination?
As a rule, overtime is compensated in the form of money or time off. It must be taken into account which regulations have been made in the employment or collective agreement.
If the contract does not clearly stipulate the choice between compensation in time off or in money, compensation in money must always be assumed, even after termination. Of course, this also applies if the contract expressly provides for compensation in money.
However, if the contract stipulates that overtime is to be compensated in free time, this also applies after termination. This is because there is normally still enough time during the notice period to compensate for any remaining overtime in free time.
However, if overtime still exists at the end of the employment relationship, i.e. after the notice period has expired, then the employee is exceptionally permitted to demand remuneration in cash.
The employer is not permitted to make a unilateral statement that existing overtime will cease to apply in the event of termination without being replaced. If such agreements have been made in the employment contract, they are generally invalid.
However, it is not unusual for so-called compensation receipts to be presented to the employee for signing. As soon as the employee signs the compensation receipt, he declares that he no longer has any claims against the employer. This also applies to overtime compensation, which is why prior legal advice is urgently recommended for such agreements.
After termination, the employee should also demand payment relatively quickly and not wait too long, as an exclusion period is often specified in employment contracts or collective agreements. This specifies the period during which claims arising from the employment relationship can still be asserted after termination.
The Federal Labor Court sets a deadline of at least three months here. In order to comply with this deadline, it is sufficient if the action for protection against dismissal was filed in good time. If the contract does not provide for a preclusion period, the claim becomes time-barred after three years as usual.
Scope of remuneration for overtime after termination of employment
The final amount of remuneration is based on the hourly wage, unless otherwise specified (Section 612 of the German Civil Code). There is a formula for calculating the gross hourly wage which reads:
((3 x gross monthly wage) / 13 ) / hours worked per week
- Example:
Employee A earns €4,000 per month for a 40-hour week. His hourly wage is therefore 23.08€ (gross). If A now works, for example, 10 hours of overtime in a month, he is entitled to another 10 x 23.08€ = 238.80€ in addition to his basic salary.
However, it is possible to agree on higher remuneration in the contract, i.e. a so-called overtime surcharge. This is almost always the case in collective agreements. Normally, 25% more is provided for, but this is sometimes staggered according to the number of overtime hours.
An agreement on a supplement can also be made by the employment contract. According to the new case law of the Federal Labor Court, the bonuses also exist for part-time employees from the first overtime hour.
This means that it is not necessary to exceed the normal working hours of full-time employees. However, the employment contract may also provide for a so-called lump-sum payment, which means that overtime is paid together with the salary.
In order for such a clause to be permissible in the contract, it must meet certain requirements. On the one hand, there must be a clear wording and, on the other hand, the clause must be clearly understandable for the employee.
However, this is only the case if the employee can make an estimate of what to expect. For example, if he can estimate the extent of the overtime.
Furthermore, compliance with the Minimum Wage Act must also be taken into account. This means that at least the minimum wage must be paid on average for the hours worked in total.
For example, the Federal Labor Court has ruled that a clause according to which "required overtime" is paid with the monthly salary is inadmissible as it does not comply with the transparency requirement (BAG, judgment dated September 1, 2010, 5 AZR 517/09). This is because it is not clear from this wording to what extent the overtime may be incurred.
However, a clause which states, for example, that "the first 20 hours of overtime are included in the salary" is permissible according to the Federal Labor Court, as it is considered to be clearly understandable (BAG, ruling dated May 16, 2012, 5 AZR 331/11).
Is it possible to work off overtime after termination?
Many employees are not particularly motivated to continue working at the company after being laid off, which is why the question arises as to whether the overtime can be celebrated.
The basic prerequisite for this is that the employment contract or collective agreement provides for time off in lieu of overtime. In addition, it is important who decides when the compensatory time off takes place.
The same regulations apply here as existed prior to the termination. If the employee is basically entitled to determine the time of compensatory time off, this does not change after the termination.
The outstanding overtime can then be reduced during the notice period. If, on the other hand, the determination of the time for compensatory time off is left to the employer, the employee requires the employer's consent.
Is it possible for the employer to bridge the notice period with overtime?
But what happens now if the employer wants to bridge the notice period with overtime, which would save him the financial compensation for the overtime?
Here again, the contractual provisions that the parties had already agreed upon before the termination are relevant. If the employer is contractually entitled to determine the time for compensatory time off, then this continues to apply after the termination.
This allows the employer to determine how the employee is to compensate for overtime, for example by giving the employee time off.
However, it is important to note that the order must be formulated precisely, as it is usually to be understood as a mere release from work if the employer sends the terminated employee home within the notice period. Consequently, this does not automatically compensate the overtime in free time.
The employer must rather explicitly disclose his intentions. This is the result of a decision by the Federal Labor Court. The case to be decided there specifically involved the following wording:
"The defendants irrevocably release the plaintiff from the obligation to perform work up to and including ... with continued payment of the agreed remuneration. Vacation entitlements of the plaintiff ... shall be granted with the release in kind."
The claims from overtime are not to be equated with vacation claims, which is why the employee was still entitled to outstanding overtime after the dismissal, which the employer had to compensate in money (BAG, judgment dated November 20, 2019, 5 AZR 578/18).
What happens to the overtime hours in the event of termination without notice?
Compensation for overtime is only possible in the case of an existing employment relationship, which ends in the case of ordinary termination when the notice period has expired.
However, termination without notice results in the immediate termination of the employment relationship. Therefore, only monetary compensation for overtime can be considered, even if compensation in free time is normally determined.
Overtime in termination agreement
A termination agreement serves to terminate the employment relationship by mutual agreement (Section 311 (1) BGB). For this reason, it is offered by many employers instead of termination.
However, caution is advised here, as these contracts often contain clauses that refer to the remaining overtime. Among other things, this can also be hidden in a release clause.
However, care must be taken here, because if the employee does not receive a correspondingly higher severance payment, he or she should by no means forego compensation for the overtime.
