What are my legal obligations?
Overtime, or additional hours, can be interpreted very differently. For employees who are contracted to full-time positions, overtime may be anything extra outside 35-40 hours. For those who are employed as a part-time employee, any additional hours, or overtime, may be anything outside the hours they are contracted to. What is considered overtime or additional hours is entirely dependent on the wording in your employment contracts, as well as any other additional company policies.
Recently, the Employment Court ruled that employers who seek to require an employee to be available for additional hours of work outside those set out in their employment agreement will need to satisfy three key factors in their employment agreements:
- Ensure that you have genuine reasons, based on reasonable grounds to require your employee to work additional hours. Project deadlines, a busy influx in customers or additional management training are all seen as good, work-related reasons.
- Include an availability clause in the employment agreement - Retail NZ can help you with this!
- Make sure that your employee is being adequately paid for the additional hours of work. If an employee is on an hourly rate, there would be an expectation for your staff to be paid at least this hourly rate for any excess hours of work.
It is worth noting that there is no legal maximum number of hours an employee can work, and there is also no requirement to pay an employee more than the minimum wage or their existing hourly rate for any additional or overtime hours.
An employee who underperforms throughout the day, or engages in areas of negligence or misconduct, should not be made to "pay back" time; these issues need to be handled through the appropriate performance or disciplinary channels.
It is always important to remember your 'good faith' obligations. This means being communicative, active and constructive with your staff members. For example, it wouldn't be reasonable to require your employees to work overtime without consulting them first and explaining the reasons why.
Case law is forever shifting the goal posts in the employment space, so for any tricky contractual matters - be sure to get in touch with our Business Advisor, Olly, - he's always available to lend a hand.
Published in the 27th May 2019 edition of Talking Shop.