Overtime: what applies when people work longer

When overtime has to be paid

The requirement is that the extra work was occasioned. The Federal Labour Court requires it to have been ordered, approved or tolerated, or at any rate to have been necessary to complete the work owed. Anyone staying longer on their own initiative without anyone knowing has a hard time of it.

The pay itself follows from section 612 BGB where nothing else has been agreed: pay is deemed tacitly agreed where the service is only to be expected in return for pay in the circumstances. For very senior services that can be different.

The premium that does not exist

There is no statutory entitlement to an overtime premium in Germany. 25 to 50 percent is usual, but it is set out in a collective agreement, a works agreement or the employment contract, not in the law.

To be distinguished from that are the tax-free premiums under section 3b EStG for night, Sunday and public holiday work. They have a different basis and apply regardless of whether the work is extra work.

Blanket settlement: mostly ineffective

The clause "all overtime is covered by the salary" as a rule does not stand up to review under sections 305 et seq. BGB. The Federal Labour Court requires employees to be able to see what service they owe for their salary (judgment of 01/09/2010, 5 AZR 517/09).

A clause naming a specific number of hours can be effective, for instance "up to ten hours of overtime a month are covered by the salary". Even then the limit remains that the minimum wage has to be reached for every hour worked.

For employees on very high incomes, above the contribution assessment ceiling of the statutory pension insurance, the expectation of separate pay can be absent. That is the exception, not the rule.

Expiry and burden of proof

Many employment and collective agreements contain exclusion periods, often three months from when the claim falls due. Anyone not asserting the claim in time loses it. Without an exclusion period, the standard limitation period of three years to the end of the year applies.

In court, the employee has to set out on which days they worked from when to when and that the extra work was occasioned. In its judgment of 04/05/2022 (5 AZR 359/21), the Federal Labour Court made clear that the duty to record working time does not reverse that burden of pleading.

In practice records help both sides anyway: they turn an assertion into a figure that can be discussed.

Pay it out or take it off

Both are possible where agreed. Compensatory time off is the normal case in practice, because it costs the business less and serves occupational safety. The employer has a unilateral right to decide only where the contract or a collective agreement provides for it.

Overtime taken off remains working time within the meaning of section 3 ArbZG. The limit of eight hours a working day on average applies regardless of whether the extra work is offset later.