Overtime is work performed outside or in excess of ordinary hours, typically paid at penalty rates.
Legislation: Fair Work Act 2009; Modern Awards | Category: Working Hours
What is Overtime?
Overtime is work performed outside or in excess of ordinary hours. Employees entitled to overtime are generally paid at penalty rates (time and a half or double time) for overtime hours, or may receive time off in lieu where permitted by the award or agreement. The NES allows employers to request reasonable additional hours, but employees can refuse if the request is unreasonable.
The rules around overtime vary significantly between awards. Some awards require overtime to be authorised in advance; others specify when overtime rates apply versus when hours are simply averaged. Understanding the specific overtime provisions in the relevant award is essential.
Key Compliance Points for Employers
- Overtime rates are typically 150% for the first 2-3 hours and 200% thereafter
- Whether overtime can be directed or only requested depends on the award and contract
- All overtime worked must be paid — “authorised overtime only” policies don’t eliminate the obligation to pay for work actually performed
- Time off in lieu of overtime (TOIL) is only permitted where the award or agreement allows
- Annualised salary arrangements must account for and reconcile overtime
Frequently Asked Questions
What is Overtime?
Overtime is work performed outside or in excess of ordinary hours, typically paid at penalty rates.
Why is Overtime important for employers?
Understanding overtime helps employers comply with Australian employment law, avoid penalties, and maintain fair workplace practices.
