Overtime and Payroll Disputes

Entrance

Overtime is defined as an employee working beyond their legally mandated working hours. In Türkiye, according to the Labor Law No. 4857, the weekly working time is 45 hours, and any work exceeding this is considered overtime. In cases of overtime, the employee must be paid 50% more than their normal hourly wage. However, non-payment of overtime wages or their inaccurate or underreported status on payrolls frequently leads to disputes between employees and employers. This article will address the legal framework of overtime pay, payroll disputes, and problems encountered in the judicial process regarding this issue.

1. The Concept of Overtime and its Legal Basis

Overtime refers to work exceeding 45 hours per week. Article 41 of the Labor Law defines the limits and remuneration principles for overtime work. The law also guarantees that overtime work cannot be imposed without the worker's consent. The basic conditions for overtime work are as follows:

• Hourly Wage and Overtime Pay: Workers who work overtime are paid 50% more than their normal hourly wage for each hour of overtime. For example, a worker whose hourly wage is 100 TL should be paid 150 TL for overtime.
• Overtime Work: If the weekly working hours at the workplace are set at less than 45 hours (for example, 40 hours), work up to 45 hours is called "overtime work" and is paid at a 25% increased rate.
• Annual Overtime Limit: The Labor Law stipulates that an employee can work a maximum of 270 hours of overtime per year. Exceeding this limit results in legal liability for the employer.

2. Disputes Arising from Overtime Pay

Disputes regarding overtime pay usually arise in the following areas:

• Non-Payment or Underpayment of Overtime Pay: It is a common occurrence for employers to fail to pay or underpay employees who work overtime. When employees notice that the overtime pay stated on their payslip is insufficient, they can file a lawsuit in labor courts.
• Failure to Record Overtime Work on Payroll: Some employers may conceal overtime work by not recording it on payroll, instead paying it off the books. In such cases, the employee can file a lawsuit by proving the overtime hours worked through witness statements, workplace entry and exit records, or digital data records.
• Failure to Obtain Consent for Overtime Work: According to the Labor Law, it is mandatory to obtain written consent from the employee for overtime work. Overtime work performed without the employee's consent can be challenged in court by the employee.

3. The Legal Aspects of Payroll Disputes

Payroll is an important document that records the employment relationship between an employee and an employer. The employee's salary, overtime pay, deductions, and other benefits should be included on the payroll. Disputes regarding payroll can be categorized as follows:

• Incorrect Calculation of Overtime Pay on Payroll: Incorrect calculation of overtime hours on payroll can lead to a loss of rights for the employee. In this case, the employee can apply to the labor court to have the calculations on the payroll corrected and the missing wages paid.
• Unsigned Payroll Slips and Their Validity: The absence of an employee's signature on payroll slips can render their legal validity questionable. The employer is still obligated to pay wages in full even if the employee does not sign the slip. The employee can use the unsigned payroll slip as evidence to file a lawsuit.
• Concealing Overtime Records on Payroll: It is a common practice for employers to violate employees' rights by understating overtime on payrolls. In such cases, the employee can claim their dues by using records of their work at the workplace (for example, electronic timekeeping systems).

4. Proof of Overtime Pay and the Legal Process

In disputes concerning overtime pay, the burden of proof for overtime work rests with the employee. However, if workplace records, attendance sheets, or witness statements are available, this burden may shift to the employer, making proof easier. The Supreme Court states that in such cases, it is necessary to determine whether the overtime work was regular and continuous.

5. Supreme Court Decisions and Precedents

Supreme Court rulings serve as important guidance in cases concerning disputes over overtime pay and payroll. For example, the Supreme Court has stated that overtime work can be proven through witness statements and workplace records. Furthermore, it emphasizes that if overtime work is not reflected on the payroll, the employee's loss of rights must be compensated.

In a landmark Supreme Court decision, it was ruled that if witness statements and workplace records prove that an employee's weekly working hours exceed 45 hours, the absence of an overtime record on the payroll does not absolve the employer of their obligation to pay overtime. Such decisions provide an important basis for employees to defend their overtime rights.

6. Mediation and Resolution Methods

In labor law, mediation is mandatory for disputes related to overtime pay. Employees and employers can resolve their disagreements through mediation and reach an agreement without resorting to court. The mediation process aims to provide a faster solution by strengthening communication between the parties. However, equal representation of both parties and the protection of the employee's rights are of paramount importance in the mediation process.

Conclusion

Disputes over overtime pay and payroll are common problems in employment relationships between workers and employers. It is essential that workers receive compensation for their overtime work and that employers employ workers in accordance with occupational health and safety regulations. Balancing the rights of both parties is possible through a fair legal process. Guidance from Supreme Court rulings, effective use of mediation processes, and transparency in payroll management by employers can contribute to faster and fairer resolution of such disputes. Improvements to labor law regulations will play a significant role in preventing disputes between the parties.