Incorrect or insufficient recording of working time is one of the most common offences of employers. Time records are crucial for determining whether an employee has worked overtime or not. Overtime work can only be ordered on an exceptional basis and it should be work outside the shift schedule and in excess of the settled working hours. How should a payroll accountant properly pay such overtime to an employee?
It always depends on whether a compensatory time off will be granted to the employee. The Labour Code implicitly assumes that compensatory time off will not be granted. Therefore, compensatory time off can only be granted if the employee and the employer agree on it. Note that this is the opposite situation to working on public holidays, where the law implicitly assumes that compensatory time off is taken – see article dated 8 July 2021 (last paragraph).
The employee is always entitled to the wage earned for overtime work. This applies both to the case when the employee will take compensatory time off and to the case when he/she will not take compensatory time off. However, overtime premium shall be due only if no compensatory time off is taken.
The amount of wage for overtime depends not only on the amount of overtime worked but also on the number of working hours in a month. For example, if February has 160 working hours and the employee’s monthly salary is CZK 30,000, 8 hours of overtime will be paid as (30,000/160) x 8 = CZK 1,500. However, if the overtime is worked in March, which will have 184 hours, the wage for overtime would be (30 000/184) x 8= CZK 1 304.
For more information on overtime premium and compensatory time off, see the next article.