Basic Overtime Rules and Calculations for Employers in APAC

October 11, 20191:40 pm155 views
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Some companies demand their employees to work overtime in order to finish a project under a certain deadline. And vice versa, there are times employees asking their employer to allow them to work overtime to earn some extra money. While overtime is allowable, employers must follow rules in order to not breaking the law. Here is the legal analysis of overtime law in Asia and Pacific region.

Overtime in Singapore

All Singaporean workers under a contract of service, except for managers and executives, can claim overtime work and pay. There is no Employment Act stated that employers should provide time-off in lieu instead of paying overtime. However, time-off can be granted for non-EA covered employees so long as there is a contractual entitlement.

To calculate the overtime pay for workmen & non-workmen, an employer must pay at least 1.5 times the hourly basic rate of pay and payment must be made within 14 days after the last day of the salary period. The calculation would be: hourly basic rate of pay x 1.5 x number of hours worked overtime.  

See also: MOM Warns Employees Not to Inflate Job Titles to Avoid Overtime Payment

Overtime in Malaysia

For Malaysian workers, overtime work and pay can be granted to employees under Employment Act 1955. The limit to overtime work is covered in the Employment Regulations 1980 stating that overtime work shall be a total of 104 hours in any 1 month. There is no law stating that employers can provide time-off in lieu of paying overtime. Yet, it can be done if there is an agreement between employer and employees in a contractual entitlement.

To calculate overtime period and pay, you can refer to Section 60A (3)(c) Employment Act 1995. The calculation would be: hourly rate of pay x hours of overtime x 1.5. The hourly rate of pay is calculated as follows: ordinary rate of pay per day/normal working hours per day i.e. RM57.69/8 hours = RM7.21

Overtime in Indonesia

Under the statement of the Ministry of Manpower Indonesia, employers who require their employees to work longer hours should follow these two laws.

  1. The worker who is required to work longer than the normal working hours agrees to do so.
  2. If the worker is required to work overtime, he/she might work overtime for no longer than 3 (three) hours in a day of 14 (fourteen) hours in a week.

As a note, an employer must pay overtime wages as there is no statement or contractual entitlement for providing time-off in lieu of instead of paying overtime. And the employer should pay overtime wages for employees who:

  • Work more than 7 hours a day and 40 hours a week for 6 working days
  • Work more than 8 hours a day and 40 hours a week for 5 working days
  • Work on weekends and national holidays

Additionally, the formula of overtime calculation is: 1/173 x monthly wage (monthly wage can be taken 100 percent from main salary and a fixed allowance or 75 percent of main salary if an employee receives a fixed allowance and non-fixed allowance).

Overtime in Thailand

In Thailand, there is no statement that employers should provide time-off substituting paying overtime. However, under the statement in Ministry of Labour, overtime can be granted if there is consent from employers before the time ahead, if the nature or conditions of work to do cursive or emergency work, and without the consent of employers to work on holidays, stated Ministry of Labour.

However, the hours of overtime, working holidays, overtime and on holidays should not exceed 36 hours per week. In addition, employers should pay the overtime of the minimum rate of 1.5 times the hourly wage of a normal working day. But if employees work during a traditional holiday period, the employer should pay a minimum of 2 times the normal hourly wage.

Overtime in China

In China, employers can provide time-off in lieu of instead of paying overtime. This also applies to work on rest days or weekends. The Labor Standards Act article 24 and 36 stated that wages for duties performed on rest days are increased, and these additional working hours are added to the overall monthly hours of overtime work in order to avoid overwork. The detail calculation of overtime pay can be found here.

Read also: Overtime Tips: How to Help Sleepy Employee After All-Nighter