Overtime: when it arises and how it is calculated

In brief

• Under general working hours, daily overtime is work exceeding eight hours a day and weekly overtime is work exceeding 40 hours a week that is not daily overtime.
• Daily overtime is paid at a rate increased by 50 per cent for the first two hours and by 100 per cent for the hours after them, and weekly overtime at a rate increased by 50 per cent.
• In period-based work, overtime is calculated from the hours of the period: regular working time is at most 120 hours in three weeks or 80 hours in two (section 7).
• Working time including overtime may average at most 48 hours a week over a period of four months (section 18).

Start overtime calculation by identifying the working-time arrangement and applicable threshold. Hours beyond agreed working time may be additional work, overtime or a flexitime balance, depending on the situation. The employer’s initiative, required consent and collective agreement affect their treatment.

The regular working hours decide where overtime begins

Under general working hours, regular working time is at most eight hours a day and 40 hours a week (section 5). Weekly working time may also be arranged to average 40 hours over a period of no more than 52 weeks, without exceeding the regular daily working time of eight hours. Averaged working time requires an adjustment plan drawn up in advance that shows at least the regular working hours for each week (section 29).

For period-based work, the statutory limit on regular hours is normally 120 hours over three weeks or 80 over two weeks (section 7). Using this arrangement requires a lawful basis. Besides the work listed in section 7, it may be based on an applicable collective agreement or a statutory exemption permit.

Two three-week periods or three two-week periods may be combined in order to organise the work appropriately or to avoid inappropriate shifts. Regular working time in the combined period is then at most 240 hours, and it may not exceed 128 hours in either three-week period, nor 88 hours in any two-week period.

Under flexitime and flexible working hours, the definition of overtime differs from the above, because the employee decides part of the placement of working time. In those cases what matters is on whose initiative the long day arose; the matter is covered in the guide flexitime balance, working-time bank and pekkaset.

Additional work and overtime are separated by the limit the work exceeds

Additional work is work done in addition to the regular working hours that stays below the overtime limit. It therefore arises only when the agreed working time is shorter than the regular working time the law allows. The difference in compensation is large: additional work is paid as compensation corresponding to the pay for the agreed working time, overtime at an increased rate.

All of these definitions are in section 16. The same hour belongs to one class at a time: an hour counted as daily overtime is left out of the weekly calculation, and weekly overtime is calculated from all the hours of the week after daily overtime has been separated out. The law uses the name shift roster; in everyday speech the same thing is called the shift schedule.

Overtime requires the employer’s initiative and the employee’s consent

Additional work and overtime require the employer’s initiative (section 16). The employee’s decision alone is insufficient. In some circumstances that initiative can also be inferred from the employer’s conduct, so assess the facts. With flexitime and flexible working hours, additional work and overtime must be expressly agreed.

Overtime may be worked only with the employee’s consent, given on each separate occasion (section 17). Consent may also be given for a fixed, fairly short period at a time, if that is necessary for the arrangement of the work. Additional work may be required of the employee with their consent, unless additional work has been agreed in the employment contract; even then the employee has the right, for a justified personal reason, to refuse additional work on the days off marked on the shift roster. If the regular working time agreed in the employment contract varies, additional work beyond the hours marked on the shift roster requires consent on each occasion or for a fairly short period at a time.

Two situations are settled in advance. When on-call duty is agreed, the employee is deemed to have given consent at the same time to the additional work and overtime needed during the on-call period. Preparatory and finishing work – work that is necessary so that the other employees can work their full regular hours, or that is needed in shift work to exchange information at the change of shift – may be agreed between the employer and the employee without separate consent. It may be required for at most five hours a week.

Emergency work is the third exception (section 19). The employer may have emergency work done if an unforeseen event has caused an interruption in regular operations or seriously threatens to lead to such an interruption or to endangering life, health, property or the environment. Emergency work may be done in addition to the regular working hours only to the extent necessary and for at most two weeks, and the employer must without delay give the occupational safety and health authority a written notification of the reason for the emergency work, its extent and its probable duration. Emergency-work hours are entered in the working-time records as a figure of their own.

Compensation is a percentage increase or the equivalent time off

The increase percentages come from section 20:

• Additional work: at least compensation corresponding to the pay for the agreed working time, with no increase.
• Daily overtime: pay increased by 50 per cent for the first two hours of work and by 100 per cent for the hours after those.
• Weekly overtime: pay increased by 50 per cent.
• Period-based work: where the work has continued for the whole two-week period, pay increased by 50 per cent for the first 12 overtime hours, and where the work has continued for the whole three-week period, for the first 18 overtime hours; for the hours after those, pay increased by 100 per cent.
• Sunday work: pay increased by 100 per cent.

Compensation may also be given as time. The pay for additional work or overtime and the increased portion for Sunday work may be agreed to be exchanged, in part or in full, for corresponding time off during the employee’s regular working hours, and the length of the time off is calculated at the same increase rates (section 21). One hour of 50 per cent overtime is therefore one and a half hours off and one hour of 100 per cent overtime is two hours off; additional work is exchanged hour for hour. The time off must be given within six months of the work being done, unless otherwise agreed.

The hours and the compensation paid for them are recorded employee by employee (section 32); the content of the records and the retention period are covered in the guide working-time records.

Example: the same 48-hour week on two agreed working times

The employee follows general working hours. The week has one ten-hour day and six hours of Saturday work at the employer’s request.

Daily overtime is the part of Wednesday that exceeds eight hours, that is, two hours. The other days stay at eight hours or below, so the week’s remaining 46 hours go to the weekly calculation. Weekly overtime is the part of those hours that exceeds 40 hours: six hours. Weekly overtime is calculated from all the hours of the week, so it is settled only when the week ends, and Saturday’s hours are classified by the same rule as weekday hours.

If a weekly working time of 37.5 hours has been agreed in the employment contract and 7.5 hours have been marked on the shift roster from Monday to Friday, the same hours divide into four classes instead of three.

The 2.5 hours of additional work arise from five weekdays: on each of them the work exceeds the regular working time of 7.5 hours marked on the shift roster by half an hour without exceeding eight hours. The overtime limits stay at eight and 40 hours, so the overtime hours are the same in both columns.

Compensation is calculated by class. Daily overtime is two hours and therefore falls within the first two hours, so the increase is 50 per cent; for weekly overtime the increase is likewise 50 per cent. Given as time off, eight overtime hours are 12 hours off, and on the 37.5-hour contract the 2.5 hours of additional work are added to that hour for hour, giving 14.5 hours in total. If Wednesday had been an eleven-hour day, the third overtime hour would be a 100 per cent hour and correspond to two hours off.

Example: a three-week period in period-based work

The work belongs to the tasks listed in section 7, and a three-week adjustment period with 120 hours of regular working time is in use. The employee has been at work for the whole period and has worked 131 hours.

In period-based work, overtime is formed from the total hours of the period, so a single long shift produces overtime only if the period’s total exceeds 120 hours; shorter working time on other days evens it out. The 100 per cent tier begins only at the 139th hour, because 18 overtime hours at a 50 per cent increase fit on top of the 120 hours. If regular working time shorter than section 7 had been agreed for the period, for example 114 hours, work between that limit and 120 hours would be additional work and overtime would begin only at 120 hours.

Note. The length of the tier requires that the work has continued for the whole period. In an employment relationship that began or ended in the middle of the period, the period’s regular working time and the tiers must be settled separately before the period is accounted for.

Sunday work is an increase of its own alongside overtime

Work may be done on a Sunday or a national public holiday if that has been agreed in the employment contract or the employee has given consent to it (section 17). Consent is not needed if the work is, by its nature, regularly done on those days.

Sunday work must be paid at a rate increased by 100 per cent. If the work done is at the same time overtime, overtime compensation is also paid for it, calculated on the employee’s unincreased pay (section 20). Sunday’s increased portion and the overtime compensation are therefore two separate items for the same hour, and each is recorded on its own. The overtime classification is settled on a Sunday too by the same daily, weekly and period limits as on other days.

Maximum working hours limit how much overtime may be worked

An employee’s working time, including overtime, may average at most 48 hours a week over a period of four months (section 18). The limit applies to the average over the period, so a single 48-hour week fits within it and monitoring is done at period level. The working time of a driver of a motor vehicle may not exceed 60 hours during a calendar week.

Monitoring the maximum working hours is the employer’s task: the period’s start and end date must be known, and the accumulated figure must be read in connection with every new overtime request. Breaching the provisions on maximum working hours is, under section 44, a working hours violation punishable by a fine.

A collective agreement may derogate from the rules of the law

Section 34 of the Working Hours Act gives a national collective agreement the right to agree otherwise on many of the matters in this guide: on regular working hours (sections 5, 6, 7 and 9), on the compensation paid for additional work, overtime and Sunday work (section 20), on giving the compensation as time off (section 21), on the length of the adjustment period for maximum working hours (section 18; at most six months, or 12 months for technical reasons or reasons concerning the arrangement of the work), on consent to Sunday work (section 17), on the adjustment plan (section 29), on the shift roster (section 30) and on rest periods (sections 24, 25, 27 and 28). Even by agreement, averaged regular working hours may be at most 40 hours a week over a period of at most 52 weeks.

The provisions also apply in a non-organised company when the employer must follow a collective agreement on the basis of general applicability. The agreement for the sector must therefore be read before relying on the default in the law: the length of the regular working hours, the limits of the overtime tiers, the increase percentages, the conditions for exchanging overtime for time off and the length of the adjustment period may all come from the agreement. The use of flexible working hours and of a working-time bank cannot be prohibited by a collective agreement.

Checklist

• The form of working time is known. General working hours, averaged regular working hours, period-based work, flexitime and flexible working hours each measure overtime from a different limit.
• The condition for period-based work is met. The work belongs to the tasks listed in section 7, and the length, start date and regular working time of the period are fixed.
• The shift roster has been published for the period. The threshold for additional work and for overtime under averaged working hours is read from it.
• The initiative and the consent are on record. The work was done on the employer’s initiative, the employee consented on each occasion or for a fairly short period, and under flexitime or flexible working hours overtime has been expressly agreed.
• Daily and weekly overtime are itemised separately so that the same hour appears in one class.
• The tiers are calculated correctly: the first two hours of daily overtime at 50 per cent and the rest at 100 per cent, weekly overtime at 50 per cent, and in period-based work the first 12 or 18 hours at 50 per cent.
• Additional work is separated from overtime. It is compensated so as to correspond to the pay for the agreed working time and does not add to the overtime accumulation.
• Sunday’s increased portion is an item of its own with any overtime compensation alongside it, calculated on unincreased pay.
• Emergency-work hours stand out as a figure of their own and the notification to the occupational safety and health authority has been made.
• Hours exchanged for time off have been calculated with the increase percentages and the six-month deadline for giving the time off is in the calendar.
• The four-month average has been read: working time including overtime stays at an average of 48 hours a week.
• The collective agreement’s own figures have been checked before the calculation relies on the default limits of the law.