Overtime flat rate vs. all-in contract

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Overtime flat rate vs. all-in contract in Austria

Genuine overtime lump sum vs. non-genuine overtime lump sum

Overtime worked is compensated individually in two different ways, depending on the agreement between employee and employer:

• Time compensation
• Overtime allowance

The flat rates for overtime are differentiated as follows:

• genuine overtime allowance
• Non-genuine overtime allowance (all-in agreement)

IMPORTANT! The amount of the real overtime lump sum remains the same even if the work is not performed. This means that even if the agreed work is not performed, the agreed lump sum must be paid. If a genuine overtime flat rate is not achieved over a longer period of time or permanently, it can be adjusted to the actual requirement. Time Professional personnel cloud supports you in this area with reporting date-related evaluations and annual statistics.

Regulations for genuine overtime allowance

The genuine overtime allowance is a specific numerical amount that is paid in addition to the monthly salary to compensate for overtime. It appears as a separate remuneration component in payroll accounting and is not taken into account when calculating special payments, unless otherwise stipulated in the collective agreement.

Regulations for non-genuine overtime flat rate

The non-genuine overtime lump sum is an agreement that compensates for overtime actually worked by overpaying the collectively agreed minimum salary. It does not appear as a separate remuneration component in payroll accounting and must be taken into account as a dependent component of wages or salary when calculating special payments. Since 1.1.2016 the basic wage to which the employee is entitled (= the wage for normal working hours) must be stated in the employment contract or service contract. If this information is missing, the employee is entitled to the standard hourly wage that is customary in the industry and the location and that is due to comparable employees of comparable employers at the place of work.

IMPORTANT! The non-genuine overtime lump sum does not show the number of overtime hours covered by the overtime lump sum separately. It is therefore necessary to determine how many hours of overtime are actually covered by the overpayment to the minimum salary under the collective agreement before the coverage check.

Coverage check

The basic hourly wages and bonuses must be covered by the overtime allowance. The amount may not be less than the remuneration corresponding to the actual overtime worked. If the overtime worked is not covered by the lump sum, the employee is entitled to compensation for additional work if the employer was aware of the excess overtime or at least tolerated it.

It is the employer's task to check whether the overtime worked is actually covered by the overtime allowance. The decisive factor here is the average number of overtime hours worked in a calendar year.

Example 1: Rudi Renner's genuine overtime allowance compensated him for 10 hours of overtime per month - i.e. 120 hours of overtime per year.

Rudi works 20 hours of overtime in February, May and July, 5 hours in October and 15 hours in November and December. He works a total of 95 hours of overtime in the calendar year. These are covered by the overtime allowance.

Example 2: Cloudia Rosso has a non-genuine overtime flat rate (all-in agreement). There is therefore no dedicated hourly value defined in the employment contract that is covered by the overtime payment.

Due to an important project, Cloudia Rosso works more evenings and weekends for six months (in compliance with statutory rest periods and weekend rest). In the fourth quarter, the HR department must now carry out the annual cover review and check whether the overpayment is sufficient. Depending on the working time model, flexitime framework and collective agreement requirements, all overtime must therefore be correctly determined and evaluated in order to be able to carry out a cover check.

IMPORTANT! A genuine/genuine overtime flat rate does not replace the legal obligation or the need to record working hours! Especially with the non-genuine overtime flat rate (all-in agreement), no meaningful coverage check can be carried out without a time management system.

Please note that, depending on the collective agreement
a) one cover check per year is prescribed and
b) the calculation of the overtime wage types is different. Personalwolke can provide you with automated support in this areaby keeping track of the accrued overtime in "shadow accounts" throughout the year, so that a cover check can be carried out efficiently and quickly in the event of a false overtime flat rate.