What is a 40-hour work week?
A 40-hour work week is when an employee is paid for working eight hours a day for five days in a week. Time off for meal or refreshment breaks is generally unpaid, so an example of the working arrangement may be Monday to Friday from 9 am to 5.30 pm, which includes a half-hour meal break.
Why consider a 40-hour work week?
Many employees already are completing unpaid overtime each week as they try to keep up with their workload, such as working through their meal break or staying back late one night to finish their duties. A 40-hour week may recognise that extra time is being worked anyway and compensates employees for this.
Organisations may also require flexibility to complete all the duties necessary in the work day. By simplifying the hours of work to eight hours a day, rather than 7.6 hours, they can better achieve this. For example, a small shop may be open to customers between 9 am and 5 pm, requiring staff to be available throughout the day and beforehand to open up and after hours to replenish stock.
Is a 40-hour work week legal?
Under the National Employment Standards, employers cannot request or require that their full-time employees work more than 38 hours a week, which equates to five days at 7.6 hours a day, unless the additional hours are reasonable. A typical 7.6-hour work day may involve employees being at their workplace between 9 am and 5 pm, which includes a short period off for a meal break. A 40-hour work week involves two additional hours than is stipulated as the maximum weekly hours of work.
However, there are acceptable circumstances in which employees can lawfully work more than 38 hours a week.
Additional hours can be worked if the request is reasonable, such as overtime to complete an urgent task. If the award or enterprise agreement under which the employee is hired allows for averaging the hours of work, employees may work extra hours one week and fewer hours the next, to work an average of 38 hours a week. A common example of averaging is the two-week on, two-week off arrangement undertaken by many workers in the mining industry. Another example is the RDO (rostered days off), such as a day off fortnightly on Friday to compensate for the extra hour worked on the other nine days in the period.
When averaging occurs, the employee needs to agree to work those extra hours. This agreement can be established when employees sign their employment contract, which outlines their working hours.
Therefore, it is legal if an employee works a 40-hour work week one week and a 36-hour week the next, or to work 40 hours in a week and be paid overtime for the extra two hours. Employees have the right to refuse the extra hours if the additional hours are unreasonable.
The benefits of a 40-hour work week
There are many benefits of a 40-hour work week for both employers and their employees.
For employers
A 40-hour work week can simplify operations for the business. As staff have agreed to work the additional two hours every week, employers have clarity and constancy around working hours. They also have surety around salaries and staffing levels, so they are not exposed to sudden or frequent increases in payroll costs, nor are they left shorthanded.
Employers can also experience productivity gains by having employees focused for a longer period. When employees are being paid for their extra time, they may feel appreciated and may be more engaged in their work.
Costs may be reduced if employing workers on a 40-hour work week schedule. By averaging hours and providing employees with time off in lieu, savings can be made as overtime rates are avoided.
For employees
Employees can negotiate a higher salary or receive overtime pay for work that they may currently be undertaking unpaid.
A 40-hour work week, particularly when averaging occurs, can give employees access to more free time to pursue personal interests and obligations, such as a long weekend once a fortnight.
Employees also gain more time in their working week to achieve their duties, which may reduce stress levels and lead to increased job satisfaction.
Possible challenges of introducing a 40-hour work week
Considering the challenges that may arise before introducing a 40-hour work week may make the transition more successful or may help you decide against the move.
Employee health and wellbeing
One of the clauses in the National Employment Standards that allow for additional working hours each week is the effect the extra time at work will have on the employee.
When determining if additional hours are reasonable, employers need to consider the risk to employee health and safety from working the extra hours. This includes long-term effects that may accumulate over time, such as burnout and fatigue.
Employers also need to consider the employee’s circumstances, including family responsibilities. Since these factors may not always be clear to employers, they need to consult and engage with their employees before making any changes.
The extra cost
Employees need to be compensated for the extra two hours a week they will be expected to be on the job. For those not employed under an award or enterprise agreement, overtime rates may not apply. However, employees under an award or enterprise agreement may require an additional payment on top of their usual salary. Workers may also choose to negotiate a higher, all-inclusive salary to account for the extra hours.
Providing time in lieu may come at a cost to the business as well, as employees are off work while the business still operates.
Uncertainty around whether additional hours are reasonable
What may appear reasonable to an employer may not seem reasonable to an employee, so the ambiguity around whether additional hours are reasonable can be a challenge. The Fair Work Ombudsman reports that usual patterns of work, the notice given by the employer or employee, the employee’s role and level of responsibility, and the needs of the business all need to be considered. However, no strict rules are specified in these areas.
Being open with your workforce and encouraging them to raise concerns can help avoid discontent and breaching maximum working hour conditions in the National Employment Standards.
Alternatives to a 40-hour work week
Other options may prove to be more cost-effective for your business than introducing a 40-hour work week.
Hiring temporary staff
If the business requires staff to work longer to meet deadlines for particular projects or seasonal demands, hiring temporary or contract staff may be a more suitable option. With more people tasked with doing the work, duties can be accomplished within the typical 7.6-hour day. The cost of hiring temporary staff also may be similar to paying current staff for their extra time.
Job share
Two part-time employees working 20 hours a week will equate to one full-time worker, so if a job-share arrangement can be implemented, it may be easier to hire another person than trying to work through the legalities of extending an existing employee’s hours.
Where to seek further help
The Fair Work website has many resources that may help employers, while employers can also call the Fair Work Info line on 13 13 94 to receive information.
An employment lawyer may also be able to help you determine if requests for additional hours are reasonable.
Changing working hours is not something that employers can take lightly. By analysing what is lawful under National Employment Standards and weighing up the pros and cons any changes may have on business operations and employee wellbeing, you can make an informed decision.
Read more: What is Overtime? A Guide for Employers in Australia
