For international employers, navigating working time compliance across multiple jurisdictions is a critical but often underestimated challenge. The financial consequences of non-compliance can be severe, especially as many countries allow employees to backdate claims for several years. Beyond financial exposure, poor compliance can damage company culture, reduce productivity, and raise red flags during due diligence in corporate transactions.
Below, we give an overview of the key areas of compliance that a global employer should be aware of and what they should monitor.
Maximum limits on working time
Strict caps on weekly and daily working hours put employers at risk of automatic violations if exceeded. Most countries set an upper limit to protect employee health (often 10 hours per day and 48 hours a week). In the EU, the 48 hour maximum weekly limit includes the combined total of an individual’s hours across multiple employers and while an employer is not required to proactively enquire about secondary employment they may become liable if they are aware that the maximum limit has been exceeded.
Overtime and pay
In addition to maximum limits, many jurisdictions define a lower threshold that separates standard hours from overtime (both of which, when combined must be within the maximum limit). Overtime is typically paid at a premium, for example an employee in Poland is entitled to wages at 150% for additional hours increasing to 200% for night work or working on a Sunday or public holiday. This contrasts with the UK where an employee does not have a right to be paid for additional hours conditional on the average pay for all hours worked not falling below the National Minimum Wage.
Unpaid or undocumented overtime can accumulate silently over years, and in most jurisdictions, the burden of proof lies with the employer, to mitigate the risk of this the employer should have a clear overtime policy requiring pre-approval, include a clause in the employment contract stating that unauthorised overtime will not be compensated, and maintain records of hours worked.
Rest periods
Mandatory daily and weekly rest periods are a universal feature of working time laws. The EU Working Time Directive requires a 20 minute break every six hours, 11 consecutive hours of rest between working days and a minimum of 24 consecutive hours of rest in every seven day period. Notably, the weekly rest is in addition to the daily rest, effectively requiring a continuous 35 hour break each week. In some countries, such as Indonesia, employers are required to accommodate prayer breaks and therefore this is generally factored into the scheduling of rest periods.
Employee rest periods are primarily regulated as working time issues (statutory compliance) but frequently cross over into personal injury issues (tort) when an employer’s breach of duty leads to health issues or accidents. This can lead to two heads of claim and increased financial exposure for the employer.
Japan is pushing to reform its long‑hours work culture and address the persistent problems of karōshi (death from overwork) and karōjisatsu (suicide linked to overwork). Karōshi was once limited to physical circulatory disorders, but court pressure has expanded it to include mental health conditions and accumulated fatigue. Courts classify over 100 hours of overtime in a month, or an average of 80+ hours over two to six months, as a high‑risk threshold for karōshi. Although just over 1,300 cases were officially recognised last year, cultural loyalty and the stigma of filing claims mean the real number is estimated at around 10,000. Japan has introduced regulations to curb excessive hours, protect rest periods, and maintain a public blacklist of employers who fail to comply.
In many countries, sundays are afforded special protection and employers should tread very carefully. For example in Germany the rules applied go beyond the general EU standard and working on a Sunday is generally prohibited unless justified by a specific exception (healthcare, emergency services, transportation, hospitality or entertainment).
Standby / on-call time
When employees are on standby or on call, the central question is: does it count as ‘working time’ or ‘rest time’?
Following a series of landmark cases the EU Court of Justice has established that if an employee must remain close to the workplace or respond within a short timeframe (e.g., 20 minutes), the time is likely to be classified as working time, even if no active work is performed. Employers therefore need to review the requirements imposed on employees during stand-by or on-call hours to determine whether this time could be identified as working time, which if it does will count towards their weekly hours maximum and will need to be factored when ensuring rest periods are respected.
Brazil’s labour law specifically addresses on call time. The ‘regime de sobreaviso’ treats on-call time as one-third working time for pay purposes when employees are off duty but reachable. Courts assess the degree of restriction on personal time to determine whether full compensation is warranted beyond this payment.
Right to disconnect
The ‘right to disconnect’ was born in France but is rapidly becoming an area of law in other jurisdictions. The rationale behind the movement is to protect personal life ensuring that work (emails, calls etc) doesn’t encroach into an employee’s off-hours.
In July 2022, the French Cour de Cassation (Supreme Court) upheld a €60,000 award to a former Rentokil Initial executive for violation of his right to disconnect. The employee had been expected to keep his phone on and respond to calls outside normal working hours.
Spain, Italy and Belgium have recently enacted similar legislation with particular focus on remote workers. Australia also has ‘right to disconnect’ regulations, which despite not being a complete ban do provide employees with protection through a right to refuse unreasonable requests, when assessing what is considered reasonable the reason, method of contact, level of disruption, whether the employee is compensated and the employee’s personal circumstances are all factors to be taken into account.
Exclusions and exemptions
Working time regulations are onerous and knowing how local requirements can be avoided can be especially helpful for an international employer, however it’s also the case that misusing or erroneously applying exemptions (often to avoid overtime payments) often leads to large pay-outs when the issue is finally uncovered.
Many countries will exclude senior level employees from their working time laws on the basis that they operate with greater levels of autonomy and set their own working hours, however the threshold level of seniority varies by country. In Spain, France, and Germany, the individual has to be at a very senior executive level to warrant an exclusion, whereas in other countries it is sufficient to simply operate at a management or supervisory level, such as Singapore.
The UK allows any employee, whatever their level in the organisation, to opt out of the working time regulations by providing their written consent. The practice of using opt-outs has become customary for professional and senior employee appointments.
Some countries will provide exemptions where the employer is unable to verify or control the working hours of an employee, therefore employees working remotely or in field sales can often be excluded.
The mandatory collective agreements that apply to employers in France provide for a number of different working time regimes depending on the grade of employee. The standard working week in France is 35 hours, however most collective agreements provide an annualised option for management grades which fixes a reduced number of working days (generally 218 days per year) and in return, the employee is not subject to daily or weekly limits to their working time. Depending on the collective agreement the continuing validity of the annualised regime depends on having regular meetings with the employee to check that their workload is manageable and is not negatively affecting their work/life balance, a failure to do so can invalidate the arrangement and expose the employer to overtime claims (often on termination of employment).
In certain jurisdictions, working time exemptions are only possible following local government approval. For example, in Japan extending hours beyond the usual statutory limits requires the employer and employee representatives to sign a written agreement (an Article 36 agreement) and file it with the local authorities.
Most countries provide options for the averaging of hours to accommodate peaks and troughs and as a result hours in one week can exceed the usual weekly maximum if they are balanced by a week with lower hours, however this is not without restriction and will usually be subject to limits. For example, in Germany a working week can be as much as 60 hours, conditional on the six month average meeting the standard 48 hours maximum.
Even if an employee is exempt from working time limits it can be the case that the laws on rest periods will still apply,therefore an unsuspecting employer can still have compliance risks despite having exempt employees.
Records
Accurate working time records are usually required by law, however even if they are not they will usually be the first line of defence in the event of an employee’s claim or regulator enquiry, without employer records, most courts are happy to yield to the full amount of an employee’s claim. As a case in point, Spanish courts have previously held that an employer’s failure to record the working time of a part-time employee entitled the employee to be compensated for full time hours the Spanish authorities take an aggressive stance on compliance and between 2020 and 2022 Spanish labour inspectors exposed more than 11,000 working time infractions leading to fines of €13.7 million.
The UK has recently updated its Employment Rights Act to require employers to record holidays and holiday pay in addition to the duration of each working day. Holiday pay is required to be calculated based on the employee’s ‘normal pay’ (includes, regular bonuses, commission, overtime etc) averaged over the prior 52 weeks, to satisfy the new requirements a record of the holiday pay calculation needs to be retained.
In most countries working time records are subject to retention periods of at least two years and many countries extend to six to seven years.
The overarching theme across each of the above sections is that taking a laissez faire approach to working time can prove very costly. Employee claims are the obvious risk but local regulators take a hard line to non-compliance with the potential for criminal convictions and ongoing year on year scrutiny.
Conversely, compliance promotes a positive culture, better productivity, and smoother due diligence in transactions.
Correcting a non-compliant position can be highly resource-intensive, often requiring large volumes of historic data to be gathered, validated and analysed in order to calculate correct entitlements and pay and therefore the longer non-compliance continues the worse the position becomes, if you are in a non-compliant position we would recommend decisive action sooner rather than later.
If you would like to discuss further, please do not hesitate to get in touch with your usual Crowe contact.
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