With new legislation, unpaid overtime is down – and employers should know the rules, says employment lawyer
Unpaid overtime has declined in Australia after the right to disconnect laws came into effect, according to a recent report.
Why? Employees are valuing their work-life balance more than ever before – making them less available to work outside of work hours, said Victoria-Jane Otavski, Managing Partner at BlackBay Lawyers.
“We’re seeing an increasing shift now,” she said.
“The lines were really blurred across the COVID period where people were predominantly working from home and were more readily available. But as things have gone back to normal, I think people have been embracing the work-life balance and expecting that employers adhere to that.”
There’s been a change in culture across the industry, she said, “especially with the structures and boundaries around employers contacting employees outside of hours. Employees are definitely expecting more now, because their personal time is just so important.”
Research from the Centre for Future Work found that unpaid overtime dropped 33% weekly as a result of the law being implemented – from 5.4 to 3.6 hours per week – as Australians look to disconnect from work.
More than half of Australians (56%) consider leaving work on time as very important, with not being interrupted by work after hours or on weekends also ranking similarly (52%).
“These survey results show the vast majority of workers want to switch off from work at the end of the day and be free of interruptions outside of their scheduled paid work hours,” the report stated.
“The extent of unpaid overtime worked means that workers are losing substantial amounts of income. Unpaid overtime has both financial and social costs for workers. This is particularly concerning as wage growth is not keeping up with inflation, and cost of living pressures are severe.”
Australia’s right to disconnect provisions enable employees to refuse out-of-hours contact from their employer unless that refusal is unreasonable. They took effect in most workplaces in August 2024, but implementation for smaller businesses is scheduled for August 26, 2025.
“The laws have definitely made employers think twice,” Otavski said.
“Many are now thinking, ‘Do I really need to contact this person? Is it reasonable?’ They’re having to give much deeper consideration as to whether their contact is actually needed so they don’t fall foul to these new laws.”
It’s also important that employers know what out-of-hours contact actually means, she said.
“People could have responsibilities outside of work, so it will be different for every person. I think it's important that employers and employees set some real expectations and guidelines around contact.”
With the shift of the right disconnect, employers should ensure great employees are recognised and incentivised, Otavski said.
“If they stay back an extra 10 minutes, it may result in them being able to progress or be promoted. Goodwill needs to be appreciated.”
While the legislation has been controversial, employers shouldn’t be too worried about the future, nor about workers wanting to disconnect more from working, she said.
“It’s [about the] bad employers who have total disregard for personal time and are endlessly reaching out to employees where they might get bitten, if you like. Employees have more power and the ability to say no.
“It’s especially important if employees have carer responsibilities, for example. It’s so important these new guidelines are followed.”
