Home - Why you must keep check on overtime for employees working from home

UpdatesMar 16, 2021

Why you must keep check on overtime for employees working from home

6 mins read

Exposure to overtime claims is a real risk for employers with employees working from home (WFH). As information communication and technology systems (ICT) evolve to support WFH, so too must time and attendance and payroll frameworks.

Now more than ever, there is a need for time and attendance (TA) systems that signal to managers and supervisors when an employee is working excessive overtime. The Fair Work Regulations provide that the employer must correct TA records as soon as it becomes aware they contain an error; however, they need to ascertain whether the overtime was required or requested.

In circumstances where employees and supervisors are not proximate to each other, supervisors are going to have to more than just delete the overtime recorded because it doesn’t match up to work schedules. There will need to be communication with employees and records kept of those communications. These interactions will require training and should be underpinned by a clear policy regarding expectations for working hours of WFH employees.

Employers will also need to consider whether TA systems should be applied to salaried employees. Since 1 March 2020, new requirements have applied in many modern awards for those full-time employees who are paid a fixed monthly or annual salary to satisfy award entitlements (including base rates, overtime, penalties, loadings and allowances). Employers of these employees must keep a record of their starting and finishing times of work, and any unpaid breaks taken, which is to be signed by the employee, or acknowledged as correct in writing (including by electronic means) by the employee, each pay period or roster cycle.

Inadequate record-keeping will make it harder to respond to claims of underpayment, which often arises after an employee leaves employment in disputed or contentious circumstances. If, for example, a salaried employee asserts they were required or requested to work hours in excess of ordinary hours or at times that would attract a penalty loading under the applicable award, the employer cannot refute these claims if TA records are either not kept or are unreliable.

The effect of s 557C of the Fair Work Act 2009 (Cth) is that if an employee claims unpaid overtime or penalties, and the employer cannot produce (without reasonable excuse) the TA records it was required to keep under the Fair Work Regulations 2009, the employer has the burden of showing that the employee did not work those hours. That will be difficult without TA records.

Monitoring working hours is also important to fulfil work health and safety obligations. A recent study in the US showed switching to WFH led to greater time spent sitting and viewing screens due to longer work hours, required screen-based meetings, and a lower ability to engage in activities outside of the home or office due to public health guidelines. Employers may need to break up sedentary time and increase physical activity throughout the work day for those who have switched to WFH.

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