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Contractual overtime and statutory overtime explained in simple terms

Contractual overtime and statutory overtime: This article explains what you have to consider as an employer and employee and how compensation works with contractual overtime and statutory overtime.

Tip: Working hours are strictly regulated by law. Therefore, the best thing is to use a time tracking software or an Excel timesheet template to record working hours accurately.

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What is the difference between contractual overtime and statutory overtime?

You do contractual overtime if you work more than the contractually stipulated working hours. On the other hand, you do statutory overtime as soon as you work more than the statutory maximum working hours of 45 or 50 hours per week. They are therefore intertwined, and the terms cannot always be separated from one another.

What is contractual overtime?

Contractual overtime is defined as working hours that exceed the working hours specified in the employment contract. In principle, contractual overtime is discussed with employees and regulated in the contract. They have to be balanced out or compensated for. The specific regulations on contractual overtime can be found in the Code of Obligations (Art. 321c para. 1 OR).

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How must contractual overtime be reduced or compensated for?

In Switzerland, contractual overtime is compensated for by adding 25% to the normal hourly wage.

25% on the hourly wage

Example: Ms K. has done 16.4 hours of contractual overtime in the last month. She receives the statutory surcharge of 25% on her hourly wage for the contractual overtime done. Ms K. works full-time amounting to 45 hours per week at an hourly rate of CHF 32. The amount to be paid for contractual overtime can therefore be calculated as follows:

32 CHF/hour x 16.4 hours = CHF 524.8 x 1.25 = CHF 656

Other compensation options

According to the law, a different type of compensation may also be applied. However, this must be recorded in writing in the contract, otherwise contractual overtime has to be paid out normally, plus the 25% surcharge. Here are some examples:

  • Contractual overtime is compensated for with the same amount of free time.
  • Contractual overtime is already included in the wage.
  • A specified number of contractual overtime hours is not compensated for.

When may an employer order overtime?

In principle, employees only have to work the hours specified in the contract. However, under special circumstances, for example, due to a high number of orders, urgent orders, etc., the employer may order contractual overtime.

Of course, contractual overtime may only be done if it is reasonable for the employee to do so.

Contractual overtime is reasonable if it:

  • Does not reduce the performance of employees.
  • Does not make family duties impossible (for example, planning a funeral).
  • Does not cause any damage to employees' health (for example, constant fatigue).

If employees feel unwell, are very tired or sick due to frequent contractual overtime work, they should discuss these issues with their supervisor as soon as possible.

Does ordered overtime have to be compensated for?

If an employee is under time pressure because his or her task is subject to a certain deadline and this deadline cannot be met under normal working hours, he or she can also do voluntary overtime.

Here is an example:

Ms K. is a member of the management staff of an SME. There has been a large number of orders these days and the workload has increased accordingly. Ms K. works one to two hours more a day throughout the week without her superiors having ordered it. Does Ms K. now have a right to compensation for these contractual overtime hours?

In principle, yes. Her superiors knew about the large amount of orders and tolerated Ms K.'s longer working hours. She is allowed to demand her contractual overtime according to her employment contract or the Code of Obligations.

However, in order to avoid any possible misunderstanding, we recommend that you discuss contractual overtime with your supervisor.

What is the difference between contractual overtime and voluntary overtime?

If you still want to do work on a certain day, for example, because you need more time for something else the next day, these hours are not contractual overtime hours in the classical sense, but voluntary extra hours. Accordingly, these hours are not compensated for as contractual overtime.

Contractual overtime due to sick leave

Unless otherwise stipulated in the employment contract, contractual overtime is not interrelated with settlement due to sick leave and will not be settled as sickness, insofar as nothing else has been regulated in your employment contract.

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What is statutory overtime?

Statutory overtime is defined as working hours that go beyond the statutory maximum working hours of 45 or 50 hours per week. The statutory maximum working time of 45 hours per week applies to employees in industrial establishments, office staff, technical workers and other employees; for all other employees, it is 50 hours per week (Article 9 of Swiss Labour Law (ArG)).

How much statutory overtime is allowed in Switzerland?

According to Art. 12 ArG, a maximum of two hours of statutory overtime per employee are permitted per day. Exceptions may be made in the event of emergencies or on non-working working days.

According to Art. 12 ArG, a maximum of 170 hours (with a maximum weekly working time of 45 hours) or 140 hours (with a maximum weekly working time of 50 hours) of statutory overtime are permitted per year.

How is statutory overtime handled for part-time work?

Part-time employees have the same rights as full-time employees when it comes to statutory overtime arrangements.

How is statutory overtime compensated for?

As with contractual overtime, statutory overtime is also compensated for with an extra payment of 25% or corresponding free time, depending on the provision in the employment contract. Since statutory overtime, in contrast to contractual overtime, offers less room for legal manoeuvring, there are few exceptions to the aforementioned regulations.

Exception 1: Only after 60 hours of statutory overtime

Office workers, specialists in the retail trade (with large companies) or technical employees. With these employees, statutory overtime compensation is only paid from a balance of ≥ 60 overtime hours in the current calendar year.

Exception 2: Labour law does not apply

Labour Law does not apply to persons who are employed abroad, for example, by the federation, the cantons or ecclesiastical institutions. The same also applies to crew members of Swiss airlines or shipping companies.

How is statutory overtime compensated for in the event of termination?

Here is an example:

Mr M. has submitted his ordinary notice of termination. He has seven days of statutory overtime left in his account. Mr M. now has many options regarding the remuneration of this time. For example, he can take one-week leave (5 working days) before the ordinary day of termination and have the remaining time paid out as compensation, with a 25% supplement. This is at his discretion and, unless otherwise stated in the employment contract, he can demand this from the employer.

By the way: In contrast to statutory overtime, according to the Code of Obligations, holidays in Switzerland may not be compensated for financially as long as the employment contract is still in force.

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