Are you paying overtime correctly?
- Akiri Heath-Adams
- Oct 9
- 2 min read
The Minimum Wage Act (specifically, the Minimum Wages Order), which applies to all employees earning an hourly rate between $20.50 and $30.75, sets out exactly how overtime must be calculated and paid.
The normal work week is 40 hours, whether employees work 5 days, 8 hours per day or 4 days, 10 hours per shift.
The normal work day is 8 hours (or 10 hours in the case of shift work).
Any hours worked in excess of these daily or weekly limits attract overtime pay. The applicable rates vary depending on whether the overtime falls on:
a normal work day,
an off day,
a Sunday, or
a public holiday.
The applicable rates are set out in the Second Schedule of the Minimum Wages Order.
Overtime Rates:
Overtime beyond 8 hours on a workday:
First 4 hours: 1.5x hourly rate
Second 4 hours: 2x hourly rate
Thereafter: 3x hourly rate
Overtime beyond 10 hours on a workday of 4-day shift week:
First 4 hours: 1.5x hourly rate
Second 4 hours: 2x hourly rate
Thereafter: 3x hourly rate
Work on an Off-Day:
First 8 hours: 2x hourly rate
Thereafter: 3x hourly rate
Overtime worked on a Sunday (where Sunday is a normal workday):
First 4 hours: 1.5x hourly rate
Second 4 hours: 2x hourly rate
Thereafter: 3x hourly rate
Time worked on a Sunday (where Sunday is not a normal workday) and Public Holidays:
First 8 hours: 2x hourly rate
Thereafter: 3x hourly rate
Time worked beyond the 40-hour workweek:
First 4 hours: 1.5x hourly rate
Second 4 hours: 2x hourly rate
Thereafter: 3x hourly rate
Because shifts and weekly hours can vary, the calculations can sometimes get tricky.
It is important to get proper advice to ensure compliance.
Failure to pay correct overtime can expose your business to:
Retroactive payments of arrears to employees (possibly with interest),
Damages payable to employees (in addition to retroactive payments),
Fines, and
Loss of employee trust
Ensuring compliance means your employees are properly compensated, and your business is protected.
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