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You don't have to pay overtime to employees who fall under the minimum earnings threshold

by , 06 July 2015
There's no increase in the BCEA earnings threshold this year. This means you don't have to pay overtime to employees who earn more than R205 433.30 per annum.

But what about employees who earn less than the minimum threshold, do you have to pay them?

Well, you do. But money isn't the only way you can pay your employees for overtime. There are other alternatives.

Keep reading to see an alternative you can implement in lieu of payment for overtime...

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With the tool I'll share with you today, you'll discover exactly what the clause in your employment contracts needs to say when it comes to saving money on overtime.

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Time off in lieu of payment – an alternative to paying for overtime

You can give your employee time off in lieu of payment for overtime BUT you can only do this if you have an agreement that says you can do so (Section 10(3) of the BCEA).

If you do give time off, here's what you need to know about time off in lieu of payment for overtime.

1. The time off must equal to what you would pay if you'd paid for overtime. So, if the employee works overtime on an ordinary working day, or a day other than a Sunday, you must give him at least 90 minutes off for each hour of overtime he works.

Example
If your employee works two hours overtime on a Monday. And you want to give him time off in lieu of paying him; you can't simply give him two hours off. You would have to give him three hours off, he gets 90 minutes for every hour of overtime worked.

2. Or, 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 off in lieu of payment.

Example
If your employee works two hours overtime on Wednesday, and you want to give him a combination of time off and payment instead of full overtime pay, you would pay him his normal wage for the two hours' overtime he works AND give him one hour off.

3. For Sunday work you'd have to give your employee double the amount of time off for each hour of overtime he works. You could also do a combination of pay and time off. You must make sure you give the employee a total equal to what he would get in pay, if you had paid him in full for the overtime worked.

Example
Your employee works six hours' overtime on a Sunday. His normal wage rate is R40 per hour. Your options are to:
•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.

Remember, you can't force an employee to work overtime except if you have an agreement. And make sure your employee signs the agreement every year. To read more on overtime, turn to chapter O03: Overtime in your Practical Guide to Human Resources Management handbook. Don't have a copy yet? Click here…

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