Overtime work is one of the institutes of labour law, the exercise of which is permitted by the Czech Labour Code only in exceptional cases, and it is therefore associated with a number of legal consequences that may arise if the legal rules are not followed correctly.
Such rules include, in particular, the determination of the extent of overtime work, the method of its recording or the method of remuneration, failure to comply with which may expose the employer, among other things, to the risk of sanctions by the Czech Labour Inspectorate.
One of the cases in which an employer was found guilty of an offence in relation to the agreed method of remunerating an employee for overtime work was dealt with by the Supreme Administrative Court in its recent decision, which, however, sided with the employer, as it did not find the pre-agreed deferral of overtime wages in breach of the law. More in our article below.
Fulfilment of the definition of overtime work (the “overtime”) occurs when two basic cumulative criteria are met, according to which such work must be:
- performed both at the employer’s direction or with the employer’s consent and the same time
- in excess of the fixed weekly working hours resulting from a predetermined working time schedule and outside the shift schedule (with exceptions for part-time work).
The employer may order overtime only for compelling operational reasons, except in the case of pregnant women and working minors, for whom overtime cannot be arranged even by mutual agreement.
When ordering overtime, the employer must comply with the statutory scope, according to which overtime may not exceed 8 hours per week and 150 hours per calendar year, while overtime for which the employee has been granted compensatory time off is not counted. This limit may be exceeded, but only by agreement with the employee, by a maximum of an additional 266 hours per calendar year.
Furthermore, the employer is obliged to record overtime as one of the periods worked in accordance with Section 96 of the Czech Labour Code, which must be recorded for all its employees without distinction (i.e. also for employees in management positions), even if overtime is not included in the above-mentioned annual limit as a result of the granting of compensatory time off to the employee.
The manner in which the employer chooses to record overtime is left to the employer’s discretion, but in any event the records must be conclusive and correspond to the facts. If overtime is proven, but not its exact extent, the court may determine the amount of the employee’s entitlement to overtime pay at its discretion.
Method of remuneration and maturity of earned wages
Due to its exceptional and non-standard nature, overtime work must be appropriately compensated.
For its performance, the employee is thus entitled to an additional payment of at least 25 % of average earnings in addition to the so-called earned wages (i.e. the wages to which the employee is entitled during the period of overtime). In lieu of additional payment, the employer may also agree with the employee to provide compensatory time off to the extent of the overtime. However, the employer is always obliged to pay the employee the earned wages, i.e. in both forms of overtime compensation.
According to the commentary literature, the due date of the earned wages is governed by the provisions of Section 141 of the Czech Labour Code regulating the due date of wages or salary in general, according to which the earned wages are due after the performance of the work, at the latest in the calendar month following the month in which the employee became entitled to the wages or in which the overtime was performed.
Deferment of wages due from the point of view of the Supreme Administrative Court
The Czech Supreme Administrative Court (the “SAC”) dealt with the period of maturity of the earned wages in its recent judgment of 25 August 2022, Case No. 6 Ads 138/2022. In the present case, the employer concluded an agreement with the employee under which the payment of the earned wages was postponed until the time when the employee would take compensatory time off or when he would be paid a supplement instead of compensatory time off.
The purpose of the agreement was to provide the employee the advantage of a regular wage income, since if the earned wages were paid in accordance with the statutory scheme, the employee would be entitled to a lower basic wage for the period in which he took the compensatory time off.
Nevertheless, the employer was found guilty by the Regional Labour Inspectorate of committing an offence (specifically, under Section 256(1)(c) of Act No. 251/2005 Coll., on Labour Inspection) because, according to the inspectorate, he did not provide the employee with the overtime wages properly and on time, i.e., in accordance with Section 141(1) of the Czech Labour Code. The fine eventually imposed amounted to CZK 50,000.-.
Since the administrative court sided with the employer in the first instance, the Labour Inspectorate filed a cassation complaint with the SAC, in which it continued to argue the mandatory nature of Section 141(1) of the Czech Labour Code, which, in its opinion, cannot be derogated from in view of the wording of Section 4a(1) of the Czech Labour Code.
However, the SAC came to the opposite conclusion in its assessment, stating unequivocally that the provision of Section 141(1) of the Czech Labour Code is dispositive in nature and therefore deviating from it in this case does not diminish the special statutory protection afforded to employees under Section 4a of the Czech Labour Code.
The SAC thus pointed out that the agreement was entered into voluntarily with the employee, as there was a mere postponement for a reasonable time (not a reduction), and therefore it cannot be inferred from such an action that the employee would be granted fewer rights.
At the same time, the SAC stated that since the agreement did not postpone the maturity of wages for work performed during standard hours, but for overtime wages, the so-called ‘earned wages’, the requirement for regular payment of wages within the meaning of Article 12(1) of the Wage Convention was not violated.
The SAC found the agreement in question to be in full compliance with the norms of labour law, and therefore, if the employer provided the employee with the earned wages on a different due date agreed with the employee, the material elements of the offence under Section 26(1)(c) of the Czech Labour Inspection Act were not fulfilled.
Where an employee is ordered by the employer to work overtime, the postponement of the due date of the earned wages for the performance of such work constitutes an advantage for the employee, as it guarantees him a regular flow of wages throughout the duration of the employment relationship, including during the period in which he is entitled to take compensatory time off in lieu of additional payment.
In order for such an agreement to be negotiated in accordance with the law, we remind you that its conclusion with the employee must always be voluntary and the date for payment of the earned wages should be agreed within a reasonable period of time, but no later than the time when the compensatory time off is taken by the employee.
If you have any questions in relation to the agreement or need assistance with its preparation, please do not hesitate to contact us at any time.
Mgr. Kateřina Lansdorfová, junior lawyer – firstname.lastname@example.org
Mgr. Jakub Málek, managing partner – email@example.com
 Decision of the Czech Supreme Court of 9 December 2010, Case No. 21 Cdo 2878/2009.