Do you get compensated for overtime?
Similarly to other highly educated people, uncompensated overtime constitutes a significant problem among economists and is yet excluded from public debate. Overtime records are rarely kept, and therefore also rarely compensated for. Uncompensated overtime constitutes grey economy.
- Overtime refers to work carried out in addition to the maximum regular working hours provided in law (as a main rule, more than 8 hours a day or 40 hours a week).
- Overtime is always carried out on the employer's initiative.
- However, overtime also includes work that the employer requires to be completed by a specific deadline knowing that the work cannot be finished by that time within the regular working hours even if no specific overtime request is presented.
- The salary payable for the first two hours of overtime above the daily regular working hours is the regular pay plus 50 per cent, and for additional hours the regular pay plus 100 per cent. Overtime may also be compensated for as time off with equivalent increases.
- The Working Hours Act applies to almost everyone, and it provides that overtime above 8/40 hours be compensated for.
Grey economy means lost pay
If an employee earning a monthly salary of €3,500 puts in three hours of unpaid overtime every week starting at the age of 30, he/she will have lost gross earnings of €157,000 by the age of 65.
The employee's pension will also have decreased by €133 a month. Similarly, unpaid overtime reduces all earnings-adjusted benefits, such as parental leave and sickness allowances. According to a study by Akava (the Confederation of Unions for Professional and Managerial Staff in Finland), the state and municipalities annually lose as much as over 129 million euro in taxes due to uncompensated overtime.
With The Finnish Business School Graduates' Working hour calculator (requires logging in to member pages), you can calculate your overtime hours and how much your monthly pay would be with your actual working hours. See instructions for keeping your own working hour records.