The Norwegian Working Environment Act regulates overtime and the calculation of general working hours. It is essential that the employer calculates working hours in accordance with the law and pay the correct overtime fees.
What are general and agreed working hours?
The general rule in Norway is that any work exceeding general working hours, as stated in the Working Environment Act, is counted as overtime. Under the Working Environment Act, general working hours are:
- 40 hours per seven days
- Nine hours per 24 hours
Some employments have lower limits for working hours than those mentioned above, either by a collective agreement or in accordance with the law.
Many employers have also agreed upon lower limits for working hours than the general rule with their employees. Typically, 37,5 working hours per week instead of 40 hours. Employers cannot agree upon higher limits for working hours than the general rule.
What is overtime?
Overtime is either working hours that exceed the general working hours as stated in the Working Environment Act of 40 hours per week or overtime as agreed in an employment contract.
Daily or weekly working hours lower than those listed in the Working Environment Act will not count as overtime. This could occur if the employee is not in a full-time position or in cases where it is agreed that the general working hours are 37,5 hours per week instead of 40 hours per week.
What is “extra work”?
Work exceeding agreed working hours but still lower than the general rule in the Working Environment Act is called “extra work.” This is typically between 37,5 hours and the general rule of 40 hours per week. Extra work is not overtime. The employee can only receive overtime pay after 37,5 hours if it is agreed that extra work shall be paid correspondingly as overtime.
If extra work is incorrectly calculated as overtime, your business risks paying unnecessary overtime to your employees.
The Working Environment Act states that overtime must be paid with an additional minimum of 40 percent. The employee is not allowed to waive the right to overtime pay.
The employee is not allowed to waive the right to overtime pay. The employee can agree to take time off in lieu of unpaid overtime if this is agreed in writing. Overtime pay must, however, be paid to the employee.
When is overtime legal?
Both overtime and extra work are legal when there is a particular need for it and it is time limited.
This is typically when the business has increased work pressure due to unforeseen events, for example, in high absence among employees or with seasonal employment.
It is not allowed to have overtime as a fixed part of the company`s working hours.
The necessity of overtime and extra work must be discussed with the employee’s representative before initiating it.
Be aware that other regulations for overtime can apply if your business is part of a collective agreement.