Over the past six months, the Covid-19 pandemic has reshaped the way many organisations operate and how they manage their workforces.
By Yolandi Esterhuizen, registered tax practitioner & compliance manager at Sage Africa & Middle East
Many businesses were not well prepared for such a profound disruption to their normal working arrangements and it is only now that they are beginning to understand some of the consequences.
The pandemic has upended work for many companies and their employees. In some instances, people were asked to work from home, without the usual supervision of their managers. In others, family illness or disrupted schooling meant that people needed to ask their employers for more flexible working arrangements.
There are also the instances where companies have needed to ask staff to work reduced hours because of the financial pressures of the pandemic. In this volatile environment, conditions are ripe for confusion about working hours and overtime pay, and for some chances to abuse overtime entitlements.
One employer reported that salaries of some workers doubled under lockdown as a result of overtime claims. It is understandable that some key workers would need to put in overtime as a result of the crisis, but such a steep rise in the wage bill is not sustainable.
The BCEA and overtime
So, what does the law say about overtime? The wage rate for overtime is set at either one and a half times the normal rate or twice the normal rate, depending on whether the overtime was worked on a normal working day, or on a day the employee would not ordinarily have worked, a Sunday or public holiday.
According to the Basic Conditions of Employment Act, companies can ask the following classes of employees to work overtime without compensation:
- Senior managers
- Travelling sales staff who regulate their own hours of work
- Employees who work less than 24 hours a month for an employer
- Employees earning more than the annual earnings threshold (currently R205 433.30 a year)
However, it is also important to review what the employment contract says about an employee’s working hours and entitlement to compensation for overtime worked. In these times, it is even more important than before to manage overtime carefully and to ensure that employment contracts are clear about overtime and normal working hours.
Making sure overtime adds value
Because overtime is expensive, the contract should specify the normal working hours after which overtime will be paid or, in the case of flexible working arrangements, the number of hours that must be worked before overtime will be paid. Rewarding employees for tasks or projects completed rather than hours worked will motivate people to finish work during their usual working day.
Work from home policies must also be specific in terms of flexibility of working hours – to which extent flexibility is allowed. Managers should set fair targets for employees and undertake regular performance reviews and discussions to ensure that teams are, as far as possible, getting their work done in their usual working hours. Overtime should always be approved by a manager beforehand to prevent unexpected costs, and to ensure that the overtime really is necessary and adds value.