Without a doubt, it’s one of the more significant and concrete legislative changes to employment law that we’ve seen in years – anywhere. And it’s a reminder that, as we enter the era of remote-first working long term, it’s high time we had a proper conversation about overtime.
For while the pandemic has accelerated the shift towards remote working, not allowing for much time to iron out the details and causing some teething pains along the way, the business world had a big problem with excessive, often unpaid out-of-hours remote working well before Covid.
An always-on corporate culture that leads to overtime
Last year, a prominent think-tank claimed that working from home during Covid had caused an ‘epidemic of hidden overtime’ in the UK. On the other side of the world, the average Australian employee has worked 1.5 hours more unpaid overtime every week since the pandemic while, at the same time, the proportion of Australian businesses with staff working at home more than doubled, from 20% to 44%. One further study of 10,000 remote workers at an Asian technology company saw a 30% in total hours worked compared to pre-pandemic, including an 18% increase in working outside regular hours.
Similar stories about the rise in extra hours and unpaid overtime have surfaced in dozens of other countries. Could it be the case that, everywhere mass remote working has been adopted, it’s led to an increase in working hours and an erosion of work/life balance?
France’s original ‘right to disconnect’ legislation, which gave employees the legal right to avoid work emails outside working hours, came into effect back in 2017. It was the first example of a Government deciding to oppose the propagation of an always-on corporate mentality and culture. Portugal’s recent laws should be viewed in this context, not as a shift in power dynamic, but as a bold attempt to correct a longstanding structural failing.
The question of overtime can no longer be ignored
Of course, the big risk when individual countries feel obliged to act on issues such as unpaid overtime is that the baby gets thrown out with the bathwater.
There is nothing inherently unethical or undesirable about overtime. On the contrary, employees may crave the opportunity to take on additional work or go the extra mile on projects that are close to their hearts. Likewise, certain calendar moments inevitably cause workload spikes, depending on the nature of the business – an eCommerce provider preparing for Black Friday or a pharma company gearing up for a regulatory submission.
However, regardless of the circumstances, no one should be forced to work excessive overtime, and committed team members should be fairly remunerated for their efforts. And what’s been evident throughout the pandemic is that there is not usually a reliable mechanism for remote workers to time-track how much overtime they’re doing, nor is there any agreed means of compensating them.
The global picture around overtime and time-tracking is extremely fragmented. In the UK, for example, employers do not have to pay workers for the extra hours worked, as long as it is made clear in their working agreement. In Brazil, where there are some pay provisions around overtime, these do not extend to home workers. In the Netherlands, the law does not regulate overtime. Employees will not receive overtime compensation if they work without an order from their supervisor, and they have responsibility for recording their own hours.
Contrast these examples with Lithuania, where employees working beyond standard hours are legally entitled to anywhere from 150% to 250% of their regular salary. Employees cannot do more than 12 hours of overtime per seven days, and employers can be fined for failing to keep track of employees’ working time.
Global employers will be required to act first
It’s doubtful that most countries will follow in the footsteps of the generous Lithuanian model any time soon. But it’s a useful illustration of the growing issues facing global employers if they fail to establish clear, compliant overtime policies for their workers.
Suppose you’re employing remote workers in both Brazil and Lithuania. Can you justify paying Lithuanian team members for overtime – where there’s a legal obligation to do so – without also extending this benefit to your Brazilian staff?
Similarly, if you have workers in Portugal and the UK, it’s hard to instigate a blanket ban on managers messaging their Portuguese team members outside of the contracted working hours and yet allow this practice to continue elsewhere in the organisation.
Once time zones get factored into the equation, things get even more complicated. In the age of Slack, WhatsApp, Teams and Trello, conversations occur 24/7 within globally dispersed teams, sending messages and tagging team members at all hours of the day and night.
What happens if a US manager unwittingly copies in a Portuguese or French subordinate on a message?
Unless everyone has a clear understanding of their employer’s policy around out-of-hours working, breaches could become commonplace – a big problem in territories where there is a legal right to disconnect (and the list is growing). Violations will almost certainly lead to fines because local jurisdictions will want to show that their legislation has teeth. Just as important, employees who feel their rights are ignored are far more likely to jump ship and move elsewhere. After all, in an increasingly global, remote-first market, they can apply for a job with pretty much anyone.
Putting employees first
Achieving harmonisation around pay, remuneration and benefits for global employees is not easy. Local compliance is non-negotiable wherever a company operates, but beyond this, it might not be viable, or even appropriate, to introduce these policies for everyone, everywhere.
What’s clear though, is that if global remote working is to work equitably, profitably and sustainably in the long-term, employers need to put their employees front of mind in everything they do. You can start by:
Reviewing existing overtime policies
Championing paid overtime only
Creating more straightforward ways for employees to track and report their time.
But, most crucially of all, it means breaking with the prevailing corporate philosophy of the past decade, acknowledging how unfit for purpose it has become in our new reality, and respecting employees’ right to sign out of work mode once they’re through their contracted hours.
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We make it our business to help companies comply with the local employment laws and working practices that exist where they have workers.Through our Employer of Record model, we help global employers go beyond the basics and adopt best-practice employment principles without the need to learn the ins and outs by themselves. So if you're looking to hire overseas, get a consultation today to hear about how you can become a leading, people-first employer with ease.
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Written by Irina Dzhambazova
Irina Dzhambazova is the editor of this publication and leads many of the marketing efforts behind Boundless. Previously she crafted stories at SaaStock and Dublin Globe and travelled the world capturing case studies of companies using the Kanban Method. Throughout this experience, she was almost always "the remote worker" and knows a thing or two about the potential and challenges of this way of working.
When I first moved from running Italian payroll to being responsible for international payroll in multiple countries, I remember being surprised by how complex being compliant with many different regulations was. It was challenging to ensure employees’ net salaries were impacted consistently across different countries. This was particularly the case with benefits in kind (vs general benefits) as they are treated differently across the board.
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