If I let an employee work excessive hours, what are the consequences?

In 2017, when the Australian Taxation Office (ATO) tried to keep employees working past 4:51 pm each day, there was a backlash from the thousands of staff. The ATO was simply attempting to increase employees’ working hours to meet the standard 37.5-hour working week, which would have meant an increase of just nine minutes per day, but employees were not having a bar of it. 

While a 37.5-hour work week is the norm in industry awards and agreements, most employed Australians typically work shorter or longer hours – and only a minority of Australians work a 37.5-hour week, according to the University of Melbourne’s Dr Mark Wooden. 

The recent Labour Force Report, created by the Australian Bureau of Statistics, identified that hours worked in many businesses have dramatically changed recently as a result of the pandemic. This is due to the fact that the pandemic inspired working from home arrangements in many businesses worldwide. While businesses were at first sceptical of the fact that employees could continue to be productive while working from home, results have shown that in fact, employees are actually putting in more hours, over and above a standard 37.5-hour working week, when working from home. 

This has sparked concern – are employees being remunerated correctly for the hours they work? 

Limits and flexibility when it comes to contracted work hours: what the law says 

Here are the key aspects you need to know to keep up with compliance for your employees: 

• If an employer requires or requests that an employee work additional hours over and above their contracted hours, then employers must ensure that the employee is paid the correct overtime penalty rate in accordance with the applicable modern award or enterprise agreement.  

• Failure to adhere to the applicable modern award or enterprise agreement terms and conditions may mean that your business is at risk of not paying its employees correctly and that you’ve broken modern award conditions.  

• Check you’re using the correct industrial instrument that applies to your employee’s employment.  

• How contracts protect hours of work are part of new Fair Work Act changes. 

While it’s great employees are going above and beyond, employers should still be taking steps to protect themselves from the potential risks of unpaid work. If you need clarification on any of the above, Citation HR’s here to help. We’d love to offer you a non – obligation chat to see how we can best help your business.  

About our author  

Carla Novacevski is a Workplace Relations Advisor based at Citation Groups’s Melbourne office. In her role, Carla tends to client queries via the 24/7 Advice Line. She is passionate about expanding her knowledge through a variety of placements in multiple areas of law.