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Four things you must know about time off in lieu of payment for overtime

by , 07 October 2013
You don't always have to pay for overtime! In terms of the Basic Conditions of Employment Act (BCEA), you can give your employee time off in lieu of payment for overtime. BUT only if you have an agreement in place. Here are the four things you must know about if you want to give time off instead of payment....

If you've opted to give your employee time off in lieu of payment for overtime worked, there are four things you must keep in mind.

Here's what you must know about time off instead of payment

#1: The Labour Law for Managers Loose Leaf Service explains that time off must equal what you'd pay for the overtime. So, if overtime happens on a normal working day (excluding Sunday), you must give your employee at least 90 minutes off for each hour of overtime he works.

For example: Let's say your employee works two hours of overtime on a Wednesday. You want to give him time off instead of paying him. But you can't simply give him two hours off.

You have to give him three hours off (90 minutes for every hour of overtime).

#2: Alternatively, you can pay your employee his normal wage and give him 30 minutes off for each hour of overtime he works. This is a combination of paying for overtime and granting time instead of payment.

Here's an example: Your employee works two hours of overtime on a Wednesday. You want to give him a combination of time off and payment instead of full overtime pay.

You must pay him his normal wage for the two hours' overtime he works AND give him one hour off.

#3: If he works on a Sunday, you must give him the amount of time off for each hour of overtime he works. You can also combine pay and time off if what you give him equals what you'd pay him in full for the overtime.

For example, your employee works six hours' overtime on a Sunday. His normal wage rate is R40 per hour. You can:

  • Pay him R480 (R40 x 2 = R80 x six hours), or
  • Pay him R240 (R40 x six hours) and give him six hours' time off.

#4: If you give him time off instead of payment for overtime, you must give him it to him within a month of him working overtime. But you can agree in writing to extend this to 12 months.

Just be sure to write the following clause into your employment contracts:

'You agree that, at the Company's discretion, you may be granted time off in lieu of payment for overtime worked. Time off will be granted as agreed with your = supervisor/manager but within (up to 12) months of your becoming entitled to the time off.'

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