Applying overtime in the company's operating hours must consider many things, this is due to the consideration of the company's effectiveness and ability to incur additional costs. In addition, companies need to make definite rules so that there are no disputes between the two parties. The rules made must also consider regulations made by the government such as how long overtime can be done per day and how the rules for calculating overtime are formulated.

The formula for overtime pay is regulated in a Government Regulation concerning employee overtime wages, specifically PP Number 35 of 2021 concerning Work Agreements for Certain Time, Outsourcing, Working Time and Rest Time, and Termination of Employment Relations. In the regulation, it is explained that overtime is working time that exceeds 7 hours a day and 40 hours a week for 6 working days a week or 8 hours a day and 40 hours a week for 5 working days a week.

In addition, working time on weekly rest days and/or on official holidays determined by the government also includes overtime or overtime hours. Meanwhile, overtime wages are wages paid by employers to workers/laborers who carry out work during overtime work.

How long is the company allowed to apply overtime every day to employees? According to government regulations, overtime work can only be done for a maximum of 4 hours a day and 18 hours a week. The provisions for overtime hours do not include overtime work performed during weekly breaks and/or official holidays. As for entrepreneurs who employ workers/laborers beyond normal working hours, they are required to pay overtime wages.

The obligation to pay overtime wages is exempted for workers/labourers in certain occupational groups. Workers/laborers in certain occupational groups have responsibilities as thinkers, planners, implementers, and/or controllers of the running of the company with unlimited working hours and higher wages. The arrangement of certain occupational groups is regulated in the Employment Agreement, Company Regulations, or Collective Labor Agreement.

If certain job groups are not regulated in the Work Agreement, Company Regulations, or Collective Labor Agreement, the Employer is obliged to pay overtime wages. In order to carry out overtime work, there must be an order from the entrepreneur and the approval of the worker/labourer concerned in writing and/or through digital media.

Such orders and approvals can be made in the form of a list of workers/ laborers willing to work overtime signed by the workers/ laborers concerned and the entrepreneur. Furthermore, the entrepreneur must make a list of the implementation of overtime work which includes the names of the workers/ laborers who work overtime and the length of overtime hours.

Companies that employ workers/laborers during overtime work are obliged to:

1. pay overtime wages

2. Give the opportunity to rest sufficiently

3. provide food and drink at least 1,400 kilo calories, if overtime work is carried out for 4 hours or more

4. The provision of food and drink cannot be replaced in the form of money

How is the calculation or formula for overtime wages?

Government regulations regarding employee overtime pay also regulates how to calculate overtime pay. This is also the answer for those who often ask how much is the hourly overtime pay. The provisions for overtime pay for workers are as follows:

- for the first hour of overtime work, 1.5 times the hourly wage

- for every subsequent hour of overtime work, 2 times the hourly wage

If overtime work is carried out on weekly rest days and/or official holidays for 6 working days and 40 hours a week, the formula for overtime pay is:

- the first hour to the seventh hour, paid 2 times the hourly wages

- the eighth hour, paid 3 times the hourly wages

- ninth hour, tenth hour and eleventh hour, paid 4 times the hourly wages

Meanwhile, if the official holiday falls on the shortest working day, the calculation of overtime pay is carried out as follows:

- the first hour to the fifth hour, paid 2 times the hourly wages

- the sixth hour, paid 3 times the hourly wages

- the seventh hour, the eighth hour, and the ninth hour, paid 4 times the hourly wage

Furthermore, if overtime work is carried out on weekly rest days and/or official holidays for a working time of 5 working days and 40 hours a week, the method of calculating overtime pay is:

- the first hour to the eighth hour, paid 2 times the hourly wages

- ninth hour, paid 3 times the hourly wages

- the tenth hour, the eleventh hour, and the twelfth hour, paid 4 times the hourly wage

How is overtime calculated per hour?

The calculation of overtime pay is based on monthly wages. How to calculate hourly wages is 1 per 173 times a month's wages.

 In this regard, if the wage component consists of basic wages and fixed allowances, the basis for calculating overtime wages is 100 percent of wages.

However, if the wage component consists of basic wages, fixed allowances, and non-fixed allowances, if the basic wages plus fixed allowances are less than 75 percent of the total wages, then the basis for calculating overtime wages is equal to 75 percent of the total wages.

Meanwhile, if the wages of workers/laborers are paid on a daily basis, the calculation of the amount of wages per month is carried out with the following provisions:

- daily wages multiplied by 25, for workers/laborers who work 6 working days a week, or

- daily wages multiplied by 21 for Workers/Labourers who work 5 working days a week

In the event that the wages of workers/laborers are paid based on the calculation of the unit of output, the monthly wage is the same as the average income in the last 12 months.

Furthermore, if the monthly wage is lower than the minimum wage, then the monthly wage used for calculating overtime wages is the minimum wage applicable in the area where the worker/laborer works.

In the event that the Company has paid overtime wages with other names and the calculated value of overtime work is equal to or better, then the calculation of overtime wages remains valid. Most importantly, the implementation of overtime pay is regulated in the Work Agreement, Company Regulations, or Collective Labor Agreement.

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Source: Kompas.com