Overtime and all-in contracts: why the record decides it

The sentence most often misapplied in Austria is: “with an all-in contract we don't need time tracking.” Both halves are wrong. An all-in contract changes how overtime is paid, not whether working time is recorded. And because the effectiveness of an all-in clause can only be checked by doing the arithmetic, the record is worth more under an all-in contract, not less.

What an all-in contract actually settles

An all-in arrangement says: the agreed salary also covers additional and overtime hours. It is permissible. But it has two limits that cannot be contracted away.

The limit set by working-time law. Maximum hours, rest breaks and rest periods apply unchanged. The AZG contains no exception for well-paid staff. Someone on an all-in contract working fourteen hours is working unlawfully long, and the employer commits the same administrative offence as with any other employee.

The limit of coverage. The salary covers overtime only to the extent that it actually covers it. Where the calculated pay for the overtime worked exceeds the part of the salary sitting above the collectively agreed minimum, a claim for back pay arises. Checking this is called the coverage test.

How the coverage test works

Simplified, in four steps:

1. Establish the collectively agreed minimum salary for the grade.
2. The difference from the actual salary is the overpayment — only that is available to cover overtime.
3. Calculate the entitlement from the overtime worked: base hour plus supplement, under § 10(3) AZG on the standard wage attributable to the individual hour.
4. If the entitlement from step 3 exceeds the overpayment from step 2, there is a shortfall — and it has to be paid.

Step 3 cannot be performed without a record. That is precisely why the claim that all-in makes recording unnecessary is the most dangerous option for the employer: they voluntarily give up the figures with which they could demonstrate coverage.

The supplements in Austria

Overtime: 50 per cent. § 10(1) no. 1 AZG. The basis under § 10(3) is the standard wage attributable to the individual hour; for piece rates and similar arrangements, the average of the preceding thirteen weeks.

Part-time additional hours: 25 per cent. § 19d(3a) AZG. This is frequently overlooked because “part-time” and “overtime” are not thought of together. Hours between the agreed part-time hours and normal working time are additional hours and attract the supplement.

When the supplement falls away. Under § 19d(3b) AZG the supplement for additional hours does not apply where the hours are compensated 1:1 by time off within the calendar quarter — or another designated three-month period — and, with flexitime, where the agreed working time is not exceeded on average over the flexitime period.

This exception has a practical consequence that is rarely thought through: it cannot be demonstrated without a clean record. Claiming to have balanced 1:1 within the quarter means showing when the hours arose and when they were taken.

The difference from Germany

German law provides no statutory overtime supplement. Whether and how overtime is paid follows from the employment contract, a collective agreement or a works agreement. Anyone coming from Austrian practice will look for the fifty-per-cent rule in the ArbZG in vain.

What the ArbZG does regulate is the limit: § 3 permits eight hours per working day, extendable to ten provided eight is not exceeded on average across six calendar months or 24 weeks. And § 16(2) requires hours beyond eight to be recorded and kept for at least two years.

Lump-sum clauses — “overtime is covered by the salary” — are also only effective within limits in Germany; a clause that does not make clear what volume is meant to be covered is open to challenge for breaching the transparency requirement. Here too, the assessment runs through the number of hours actually worked.

What happens when the record is missing

In litigation over overtime it is in principle for the employee to set out and prove when and for how long they worked, and that the additional work was ordered or approved.

That sounds like a favourable position for the employer. It flips as soon as the record the employer was required to keep is missing. The employee puts forward a plausible, internally consistent schedule — and the employer has nothing with which to contradict it. A bare denial, unsupported by any record of the employer's own, convinces no court.

In Austria, § 26(9) AZG applies on top: if the employer refuses the monthly copy under § 26(8), forfeiture periods are suspended. Forfeiture periods in collective agreements are often short — an employer who disables them by refusing extends their own liability.

In Germany the limitation period under § 195 BGB is three years. An employer deleting after two, because § 16(2) ArbZG says two, stands in the third year with no documents.

What a business should take from this

1. All-in changes nothing about the duty to record. § 26(1) AZG has no exception for staff on lump-sum pay.
2. Run the coverage test once a year, not only when somebody asks. It needs nothing but the record and the collectively agreed minimum.
3. Do not forget part-time additional hours. The 25 per cent in § 19d(3a) AZG is the most commonly missed supplement.
4. Record time off in lieu with dates. Exemption from the supplement under § 19d(3b) AZG depends on proving when the balancing happened.
5. Keep three years, not two — in Germany because of § 195 BGB, and in Austria seven in any case because of § 132 BAO.