Section 52 of the Employment Act (Chapter 373) sets the rates. Section 52(4) tells you how to work out the hourly figure they are applied to, and section 55 says when the money must arrive.
Section 52(2) — the three rates
| Overtime worked | Rate |
|---|---|
| On a Sunday | Twice the hourly rate |
| On a public holiday | The hourly rate — in addition to the usual wages payable for the holiday under section 86(1)(a) |
| At any other time | One and one half times the hourly rate |
Section 86(1)(a) provides that an employee in employment on the day immediately preceding a public holiday who is required to work on that holiday is paid his usual wages for that day as if it had not been a public holiday, and in addition is paid in accordance with the Act for the time worked. The section 52(2)(b) hourly rate is that additional payment. So the total for a public holiday is holiday pay plus the hourly rate for hours worked. See public holidays.
Section 52(3) allows an employer and employee to agree to substitute a Saturday for a Sunday for the purposes of the rates — useful where the working week runs differently, and it must be an agreement, not an instruction.
Section 52(4) — calculating the hourly rate
(a) there shall be deemed to be 52 weeks in a year;
(b) there shall be deemed to be 44 hours in a week; and
(c) the hourly rate shall be calculated:
— by dividing the annual wage by the number of working hours deemed to be in a year (52 × 44 = 2,288); or
— by dividing the weekly wage by 44; or
— by dividing the daily wage by 8.
| Wage stated as | Divide by | Example |
|---|---|---|
| Annual | 2,288 | K34,320 ÷ 2,288 = K15.00 per hour |
| Weekly | 44 | K660 ÷ 44 = K15.00 per hour |
| Daily | 8 | K120 ÷ 8 = K15.00 per hour |
On that rate, overtime on an ordinary day is K22.50 per hour, and on a Sunday K30.00 per hour. These are deeming provisions: the divisors apply whatever hours are actually rostered, so an employer cannot depress the hourly rate by asserting a longer standard week.
Section 52(5) — time off instead of overtime pay
An employer may, by agreement with an employee, instead of paying for overtime, allow time off during normal working hours at least equal in length to the overtime worked — provided it is allowed before the later of:
(a) the expiration of seven days after the day the overtime was worked; or
(b) the last day on which the overtime is payable under section 55.
- Agreement — the employee must agree; it cannot be imposed.
- At least equal in length — hour for hour. Note this is length, not value: an hour of Sunday overtime worth double pay buys only one hour off, so an employee should usually prefer the money for premium-rate overtime.
- Within the time limit — if the time off is not given by then, the overtime must be paid.
And under section 49(4), time off under section 52 is in addition to the meal, rest and weekly rest periods. It cannot be set against them.
Section 55 — when overtime must be paid
(a) be made as soon after the duty as is convenient to the employer, but in any case not later than the earlier of — seven days after the next day on which payment of current wages would normally be due, or termination of employment;
(b) be calculated to the nearest quarter of an hour of the total overtime, stand-by or call-out performed in the period; and
(c) be calculated to the nearest toea.
Paragraph (a) is the practical one: overtime cannot be carried indefinitely as an unpaid balance. And on termination it all falls due — see final pay.
Section 56 — Good Friday and Christmas Day
Where an employee works on Good Friday or Christmas Day, he shall, in addition to the overtime payment for that duty, be allowed time off during normal working hours at least equivalent to the time worked — and that time off shall be given within seven days after the day the overtime was worked.
These two days are treated differently from other public holidays: the employee gets both the pay and the equivalent time off. It is not an either/or. And under section 49(5), an employee is not liable to stand-by duty during a rest period prescribed under section 56.
Records, pay statements and proof
- Section 57 — the employer shall keep such records and make such returns of overtime, stand-by and call-out as are prescribed.
- Section 82(b) — the pay statement must separately show the amount of pay earned for overtime, call-out and stand-by duty.
- Section 137(1)(c) — knowingly making a false entry, or an unauthorised alteration or erasure, in books required to be kept is an offence.
- Keep your own daily record of start, finish and breaks.
- Work out the hourly rate yourself using the section 52(4) divisors.
- Compare it with the section 82 statement, line by line.
- Ask for the section 57 records in writing — refusing information reasonably required is an offence under section 138.
- Report a persistent shortfall to a labour officer, and remember section 96 makes unpaid wages an offence carrying a fine up to K500.
Sources
- Employment Act (Chapter 373) — ss 48–57, 74, 82, 86, 96, 137, 138
- Industrial Relations Act — PacLII 1986 Revised Edition
- Sarathy v PNG Power Ltd [2021] PGNC 681; N10316
- Mamugoba v New Britain Palm Oil Ltd [2024] PGNC 419; N11082
Before relying on anything here, read the current text of the Employment Act (Chapter 373) and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.