Site icon bbrief

How does overtime work in practice? Employment guide

Bites Editor

Overtime sounds simple – you work extra hours, you get paid extra. In practice, overtime often goes wrong because people forget the limits, skip written agreements, or keep poor time records. This guide explains how overtime works day-to-day in South Africa, so you can set clear rules, pay correctly, and avoid disputes.

Key takeaways

What “overtime” means in practice

Overtime is time worked beyond an employee’s ordinary hours of work. Ordinary hours are usually set by contract, policy, or a collective agreement. However, the Basic Conditions of Employment Act (BCEA) provides default limits for most employees, including a 45-hour ordinary work week.

In practice, you should treat overtime as a controlled exception. You should use it for genuine workload spikes, critical deadlines, or operational emergencies. Otherwise, you risk burnout, payroll disputes, and compliance problems.

Who qualifies for BCEA overtime protection

Employees earning above the BCEA earnings threshold

If an employee earns above the BCEA earnings threshold, the BCEA rules on working time (including overtime) do not apply automatically. You can still agree on overtime contractually, but the legal “default” protections and premiums do not apply by default.

Current threshold: Employees earning more than R261,748.45 per year are excluded from section 10 (overtime) and certain other working-time sections, effective 1 April 2025.

Employees excluded by role or working pattern

Even if someone earns below the threshold, some roles are excluded from working-time rules. Examples include senior managerial employees and certain employees who travel for sales work. The exclusions depend on the facts, not the job title.

If you are unsure, treat the employee as covered until you have a defensible reason to classify them as excluded. Good records matter if the classification is challenged.

The overtime rules you must apply in real life

1) Overtime must be by agreement

You may not require overtime unless you have an agreement with the employee. In practice, this should appear in the employment contract or a signed overtime policy acknowledgement.

2) Legal limits on overtime hours

As a general rule, overtime is limited to 10 hours per week. The BCEA also limits total daily hours. Practically, this means you should check both weekly and daily totals before approving overtime.

A collective agreement may allow more overtime, but only within strict conditions. One common example is a temporary increase to 15 hours per week for a limited period. Do not assume this applies without checking the relevant agreement.

3) How overtime must be paid

You must pay overtime at at least 1.5 times the employee’s wage. If you pay monthly salaries, you still need a defensible hourly wage calculation for overtime.

4) Time off in lieu must follow the BCEA rules

You can agree to give paid time off instead of paying overtime, but you must follow the statutory conversion rules. In practice, employers often get this wrong by granting “hour-for-hour” time off when the law requires a premium.

Also, the timing matters. Overtime must be paid soon, or time off must be taken within the required period unless the law allows a longer period by agreement.

5) Watch the one-year “lapse” rule for overtime agreements

If an overtime agreement is concluded at the start of employment, or within the first three months, it can lapse after one year. In practice, employers should diarise a yearly review and re-sign where needed.

How to calculate overtime pay cleanly

Step 1: Confirm the employee’s ordinary hours

Start with the contract and roster. Ordinary hours drive the trigger point for overtime. If you use averaging or compressed work weeks, apply those rules consistently.

Step 2: Convert salary to an hourly wage when needed

For monthly-paid employees, you need a consistent method to determine an hourly rate. The BCEA provides rules on calculating remuneration and wages, and a Ministerial Determination helps standardise certain calculations.

Step 3: Apply the overtime premium

Overtime pay should equal: overtime hours × hourly wage × 1.5. Keep the calculation visible on the payslip or payroll report. That transparency prevents disputes later.

Common payroll mistakes to avoid

Overtime in common working setups

Shift work

Shift schedules often create confusion because employees work long days. In practice, you must still separate ordinary hours from overtime hours. You should also check rest periods and fatigue risk for safety-critical roles.

Compressed work weeks

A compressed work week can lawfully extend daily ordinary hours, but it does not give a blank cheque. In practice, compressed schedules reduce the room for overtime on long shift days.

Averaging of hours

Averaging can smooth peaks and troughs across a cycle. However, you must apply the averaging agreement correctly, or you may unintentionally underpay overtime. Use payroll controls and keep the averaging agreement on file.

Remote and hybrid work

Remote work increases “invisible overtime”. In practice, you need clear rules on availability windows, approval, and time capture. Otherwise, you will fight about whether extra hours were authorised.

Recordkeeping and proof

Overtime disputes often turn on evidence. Employers should keep working time and pay records, because weak records can shift risk onto the employer. This is not theoretical. Courts consider recordkeeping when assessing overtime claims.

In Venter v Symington and De Kok, the court dealt with an overtime pay dispute and engaged with the importance of proper records and proof. The lesson is practical: if you do not track hours, you may struggle to defend your payroll position later.

Overview of key legal cases

Mkohonto & others (Labour Court, 2023)

This case highlights a practical point: overtime obligations often come from the contract or collective agreement wording. Employers should not assume they can sidestep overtime terms by arguing technicalities about which instruments apply. You should align your overtime clause, roster practice, and payroll outputs.

Venter v Symington and De Kok (Labour Court, 2017)

This case reinforces how overtime claims depend on evidence. If the employer’s records are poor, the dispute becomes harder and riskier to defend. Treat time capture as a compliance control, not admin.

How unpaid overtime disputes get enforced

Internal resolution first

In practice, you should try to resolve overtime disputes internally and quickly. Confirm the hours, confirm the approval trail, and then correct payroll where needed.

CCMA claims under section 73A

Employees earning at or below the earnings threshold can bring a section 73A claim to the for money owed, which can include overtime. This route is designed to be quicker and more accessible than court.

Employees earning above the threshold

Employees above the threshold generally cannot use section 73A. They usually enforce unpaid overtime via contractual claims in the appropriate court forum. The practical takeaway for employers is simple: your contract wording matters even more for higher earners.

What employers should do

What employees should know

Tax and regulatory considerations

Overtime pay is part of taxable remuneration. Employers must generally include it in PAYE calculations and on the employee’s IRP5 where applicable. Employees may feel “worse off” in a month with high overtime because PAYE withholds more, even though total annual tax depends on annual income.

Overtime may also affect UIF-related calculations, subject to UIF contribution rules and ceilings. Payroll should apply statutory limits correctly, and employers should keep supporting payroll records.

FAQ: Overtime in practice

Can my employer force me to work overtime?

Your employer generally needs an overtime agreement to require overtime. If you have agreed to overtime and the request stays within lawful limits, refusal may create misconduct risk. If there is no agreement, the instruction may be unlawful.

I earn above the threshold. Do I still get overtime pay?

Not automatically under the BCEA. Your entitlement depends on your contract or a collective agreement. Many employers still pay overtime or offer time off for retention reasons, but it becomes a negotiated term.

Can an employer give “hour for hour” time off instead of paying overtime?

Not if the BCEA applies to you. Time off in lieu must follow the law’s conversion rules and timing rules. Employers often get this wrong, so insist on a written process.

What if my manager allowed overtime verbally, but payroll refuses to pay?

This is a common internal control failure. In practice, the employer should fix the policy and apply it consistently. Keep evidence of approval. If you earn under the threshold, section 73A may help you claim money owed.

How far back can I claim unpaid overtime?

Unpaid overtime is a debt claim, and debts can prescribe. Act quickly and gather proof. The CCMA’s section 73A guidance and recent commentary highlight the importance of timely action and good evidence.

Sources

 

Exit mobile version