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11Dec

Overtime: is it possible to compensate it with rest time?

On many occasions, faced with the need to maintain operations, companies tend to compensate workers for overtime worked outside the working day with additional rest time. However, the legal system does not permit this practice so it may be the subject of legal claims.

Salary is a right that is regulated at the constitutional level, a regulation that even establishes how to compensate for hours worked outside the ordinary work day:

"The ordinary daytime work day may not exceed eight hours a day and forty-eight hours a week. The ordinary night work day may not exceed six hours a day and thirty-six a week.Overtime work must be paid fifty percent more than the stipulated salaries or wages.However, these provisions will not apply in very qualified cases of exception, determined by law."(article 58)

For its part, the Labor Code develops this figure in article 162, which defines it as follows:

"Salary or wage is the remuneration that the employer must pay to the worker under the employment contract."

Following the norms above, the Labor Code contains a series of norms that establish how to compensate for the work performed by the worker when it is carried outside the ordinary working day, which we are interested in for the case under study in 2 in particular.

The first is found in the first paragraph of ordinal 139 of the Labor Code, which regulates the form of payment for time worked outside the ordinary work day, that is, over time:

"The effective work that is carried out outside the limits previously established, or that exceeds the working day less than these that is contractually agreed upon, constitutes extraordinary working hours and must be remunerated with fifty percent more than the minimum wages, or the salaries higher than those that have been stipulated."

The second rule of interest is found in section 152 of the Labor Code, which provides how to compensate personnel who, due to a completely exceptional situation, find themselves in the need to work during their day of rest or during a holiday.

For this, it is essential to remember that for workers who receive their salary on a monthly basis (even if they have biweekly advances), the calculation of their salary is made on a 30-day basis, so the payment for all days of the month (including rest) is already contemplated. For this reason, when the employee must work during his or her day of rest or a holiday (whether it is a holiday with mandatory payment or non-compulsory payment), the additional payment of a single day is added to complete the so-called "double payment." The norm mentioned indicates:

"The employer who does not grant the day of rest will incur in the obligation to pay his workers, for that day, double the salary that he ordinarily pays them."

In summary, overtime hours carried out as an extension of the daily work day are compensated with an additional 50% of the value of the ordinary work hour, while tasks carried out during rest days or holidays are compensated with an additional 100%.

Considering the higher values of overtime already mentioned, it would be disproportionate and therefore detrimental to the worker to compensate an overtime hour with an hour of ordinary rest.

In any case, even if said time is proportionally compensated,there are many opportunities in which the Second Chamber of the Supreme Court of Justice has highlighted the prohibition of making this type of compensation,basing its decision on the impact on the worker's right to rest and the lack of a rule in the law that allows overtime to be compensated in a manner other than that established by the Political Constitution and the Labor Code:>

Labor regulations clearly indicate a single way to remunerate those tasks carried out outside of ordinary working hours. In this regard, article 58 of the Political Constitution provides: "Work during overtime must be paid fifty percent more than the stipulated salaries or wages." For its part, the Labor Code in section 139 establishes: "Actual work that is carried out outside the previously established limits, or that exceeds the working day less than these that is contractually agreed upon, constitutes extraordinary working hours and must be remunerated with a fifty percent more than the minimum wages, or the wages higher than these that have been stipulated […]". This Chamber has addressed this issue in various resolutions and has determined the obligation of the employer to comply with the legal system (see rulings numbers 424, of 10:15 a.m. on May 14; 486, of 10:05 a.m. on June 4, both in 2008; and 803, at 9:30 a.m. on August 26, 2009). Thus, the payment of overtime through compensation, whether with free time or some other mechanism other than monetary remuneration, does not constitute remuneration in accordance with the law; whether or not the worker has objected to it.(Resolution 1208-2015 of the Second Chamber of the Supreme Court of Justice of 10:45 a.m. on October 28, 2015).

Therefore, even though time off is granted in compensation for overtime worked, in the eventual scenario of discussing the payment of overtime in a judicial process, it is highly probable that a judge will determine the duty to compensate financially and in the terms provided by the Labor Code the overtime hours worked.

At Bufete Godínez y Asociados, we specialize in counseling and advising employers in labor and employment law. If you need any additional information, do not hesitate to contact us by clicking here.

 

About the Autor

Jairo José  Cerdas

Jairo José Cerdas

Attorney
Email: [email protected]
Phones +506 2289-5052 | +506 2282-2164 | +506 2289-5275
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