Overtime: Remuneration and Legal Calculation

Overtime is one of the most sensitive topics in French labour law. Every year, labour inspectorates identify thousands of violations linked to incorrect application of remuneration rules or miscounting of working time. However, the Labour Code is precise: as soon as an employee exceeds the legal duration of 35 hours per week, mandatory surcharges apply. In this article, we examine in detail the regime applicable to overtime — its definition, calculation, surcharge rates, annual contingent and social and tax exemptions in force — so that you can manage your company in full compliance.

Definition and triggering of overtime

What is overtime?

According to article L3121-28 of the Labour Code, overtime comprises all hours of work performed beyond the legal weekly duration set at 35 hours. This legal duration is calculated on a civil week, which begins on Monday at 0:00 and ends on Sunday at 24:00, unless a collective agreement provides for another organisation.

It is important to distinguish overtime from complementary hours, which exclusively concern part-time employees working beyond the duration provided in their contract, without exceeding 35 hours. Confusion between these two concepts is frequent and can lead to disputes before the labour court.

Who decides on overtime?

Overtime is carried out at the employer's request, whether explicit or implicit. An employee cannot, in principle, impose overtime on themselves and subsequently claim remuneration for it — unless the employer was aware of it and did not oppose it (consistent case law of the Court of Cassation, notably Cass. soc. 5 May 2021, no. 19-14.295).

The burden of proof for overtime is based on a shared evidentiary regime: the employee must support their claim with sufficiently precise elements (badging records, late emails, schedules) and the employer must respond with its own working time control elements.

Calculation of overtime and surcharge rates

Legal surcharge rates

In the absence of a collective agreement or company agreement providing for more favourable provisions, the legal surcharge rates applicable are as follows (article L3121-36 of the Labour Code):

• 25% for the first 8 hours of overtime worked in the week (from the 36th to the 43rd hour)

• 50% for hours worked beyond (from the 44th hour onwards)

A collective agreement or sectoral agreement may reduce the rate of the first tranche to a 10% minimum, but can never provide for a lower rate.

How to calculate remuneration in practice?

The calculation is based on the gross hourly rate of the employee. For an employee remunerated on a monthly basis, the hourly rate is calculated as follows:

Hourly rate = Gross monthly salary ÷ (Monthly reference duration in hours)

The monthly reference duration for a full-time employee on a 35 hour/week basis is 151.67 hours (35 h × 52 weeks ÷ 12 months).

Concrete example: An employee receives €2,500 gross per month. Their hourly rate is 2,500 ÷ 151.67 = €16.48 gross/hour. If they work 4 hours of overtime in the week:

• 4 × 16.48 × 1.25 = €82.40 gross in surcharge due.

Replacement of surcharge by compensatory rest

Article L3121-33 of the Labour Code allows, subject to a collective agreement, the replacement of all or part of the payment of overtime (and associated surcharge) by a compensatory rest day (RCR). This rest must be taken within 12 months following the opening of the right and cannot be unilaterally imposed by the employer without a collective agreement.

The annual overtime contingent

Definition and legal threshold

The annual contingent represents the volume of overtime hours that the employer may have employees work without requiring authorisation from the labour inspectorate, but while respecting the obligation to inform the CSE (Social and Economic Committee). In the absence of a collective agreement, the reference legal contingent is set by decree at 220 hours per year and per employee (article D3121-24 of the Labour Code).

A sectoral or company agreement may modify this contingent upwards or downwards. In certain sectors (construction, hospitality and catering), it can reach 300 to 400 hours.

Beyond the contingent: the mandatory compensatory rest (COR)

Any overtime hour worked beyond the annual contingent entitles the employee to a mandatory compensatory rest (COR). This compensation is fixed at:

• 50% of overtime hours worked beyond the contingent in companies with 20 employees or fewer

• 100% in companies with more than 20 employees

The omission of COR exposes the employer to significant labour court sanctions, as it is treated as additional remuneration due as of right.

To effectively manage the tracking of working hours and the dematerialisation of associated HR documents, electronic signature solutions for HR enable you to secure amendments to employment contracts and agreements on modulation of working time.

Tax and social exemptions: the Fillon/TEPA scheme

Exemption from income tax

Since the law of 21 August 2007 (so-called TEPA law), reaffirmed and strengthened by the law of 16 August 2022 (law on urgent measures for the protection of purchasing power), remuneration paid for overtime benefits from an exemption from income tax capped at €7,500 per year (article 81 quater of the General Tax Code).

This exemption applies to the gross remuneration of overtime, including the surcharge. It is automatic and requires no particular action from the employee.

Reduction in employee contributions

In parallel, employees benefit from a reduction in employee contributions on overtime, calculated at a rate of 11.31% (as of 1 January 2024) on the gross remuneration of these hours, within the limits of old-age insurance contributions due. This reduction can represent a significant net financial benefit for employees.

Employer's flat-rate deduction

On the employer's side, a flat-rate deduction of employer contributions also applies, subject to conditions. For companies with fewer than 20 employees, this deduction is set at €1.50 per hour of overtime worked. For companies with 20 or more employees, the deduction has been abolished since 2012.

These exemption mechanisms require rigorous traceability of hours worked. Pay slips must mention separately the overtime and their surcharge remuneration, which makes a reliable working time management system essential. The dematerialisation of pay slips and associated documents, governed by the comprehensive guide to electronic signature, can considerably simplify this management.

Employer obligations and risks in case of non-compliance

The obligation to count working time

Article L3171-4 of the Labour Code requires every employer to put in place a system for counting the duration of work of each employee. This obligation has been strengthened since the CJEU ruling of 14 May 2019 (case C-55/18, CCOO v. Deutsche Bank), which requires a system that is objective, reliable and accessible enabling the measurement of daily working time.

The absence of such a system constitutes an offence noted by the labour inspectorate and can lead to:

• Administrative fines that can reach €1,500 per employee concerned

• Requalification of work organisation with salary restatement over 3 years

• Damages before the labour court in case of individual dispute

Maximum durations not to be exceeded

Independently of overtime, the employer must ensure compliance with the maximum working durations provided for in the Labour Code:

• 10 hours per day (with possible exemptions up to 12 hours)

• 48 hours per week (absolute maximum)

• 44 hours on average over a period of 12 consecutive weeks

Non-compliance with these thresholds exposes the employer to criminal sanctions (fourth-class misdemeanour, i.e. €1,500 per employee and per violation).

Collective agreements and flexibility in work organisation

Sectoral or company collective agreements play a central role in modulating the rules relating to overtime. The Labour Law of 8 August 2016 established the primacy of company agreements over sectoral agreements in many areas, including the surcharge rate for overtime (10% floor), the annual contingent and the compensatory rest regime.

The negotiation and signing of such company agreements require a formalised process. Electronic signature in the company offers a secure solution for concluding these collective agreements in compliance with legal requirements, with probative value recognised before social courts.

Legal framework applicable to overtime

The legal regime for overtime in France is based on a dense normative corpus at multiple levels.

Labour Code:

• Article L3121-28: definition of overtime (hours worked beyond the legal duration of 35 hours)

• Article L3121-33: possibility of replacing payment with compensatory rest, subject to collective agreement

• Article L3121-36: legal surcharge rates (25% and 50%)

• Article L3121-30: annual overtime contingent

• Articles D3121-24: setting of legal contingent at 220 hours by decree

• Article L3171-4: obligation to count working time

• Articles L3121-37 to L3121-40: mandatory compensatory rest beyond the contingent

General Tax Code:

• Article 81 quater of the CGI: exemption from income tax on overtime remuneration, within the limit of €7,500 per year, arising from the law of 21 August 2007 and confirmed by the law of 16 August 2022

Social Security Code:

• Article L241-17 and following: reduction of employee contributions on overtime at a rate of 11.31% (as of 1 January 2024)

• Flat-rate employer deduction of €1.50/hour for companies with fewer than 20 employees

European and national case law:

• CJEU, 14 May 2019, C-55/18 (CCOO v. Deutsche Bank): obligation for every employer to put in place an objective and reliable system for counting daily working time

• Court of Cassation, Civil Chamber, 5 May 2021, no. 19-14.295: shared burden of proof regime in overtime matters

Employer obligations and risks: Any failure to pay or calculate overtime correctly constitutes a hidden work offence (article L8221-5 of the Labour Code) if intentionality is established, punishable by 3 years' imprisonment and €45,000 fine. The prescription period for salary restatement is 3 years (article L3245-1 of the Labour Code). Staff representatives and trade union delegates have a specific right to alert in the event of exceeding the annual contingent, and the CSE must be consulted before any recourse to overtime beyond this contingent.

Concrete usage scenarios

Scenario 1: A manufacturing SME at production peak

A manufacturing SME of about 80 employees faces an exceptional order requiring a temporary increase in pace over 6 weeks. The company decides to resort to overtime for 40 operators, at the rate of 6 hours of overtime per week and per employee.

Calculation: 6 hours × 25% surcharge × 6 weeks = 36 hours of surcharge overtime per employee over the period. On the basis of an average gross hourly rate of €14, the additional cost per employee is 36 × 14 × 1.25 = €630 gross. For 40 employees: €25,200 gross in additional labour costs.

Thanks to the flat-rate employer deduction (€1.50 × 36 hours × 40 employees = €2,160) and exemption from employee contributions, the SME achieves a net saving of approximately 15 to 20% on these remuneration compared to temporary recruitment. The amendments for temporary modification of the work pace are signed electronically, reducing the time to collect signatures from 5 days to less than 24 hours.

Scenario 2: An accountancy firm during tax season

An accountancy firm of 25 employees experiences intense workload every year between March and June (closing of fiscal years, tax returns). Employees regularly work between 8 and 12 hours of overtime per week during this period.

The firm, which has negotiated a substitution agreement with its staff representatives, opts for compensatory rest day (RCR) rather than immediate payment. Accountants recover 3 to 4 days of rest in July-August, a quiet period for the firm. This system allows the firm to save immediate cash flow estimated at €35,000 per fiscal year while retaining teams through a valued benefit in kind. RCR agreements are formalised and signed via a qualified electronic signature solution, guaranteeing their enforceability in the event of labour dispute.

Scenario 3: A logistics company managing a tight contingent

A logistics company of about 150 employees, including 90 drivers and warehouse staff, approaches each year the threshold of 200 hours of overtime per employee (out of 220 authorised) during the festive periods. To avoid exceeding the contingent and the associated mandatory compensatory rest (COR) — which would represent 100% of hours exceeding the contingent for a company of this size — the HR manager puts in place real-time tracking dashboard.

When an employee approaches 200 hours, the system automatically alerts the manager to redistribute the workload. This rigorous tracking, coupled with the dematerialisation of schedules and documents for modulation of working time through tools compliant with the requirements of eIDAS 2.0 regulation, enables the company to avoid an estimated additional cost of €18,000 in COR over the fiscal year, while remaining in compliance with CSE information obligations.

Conclusion

The regime for overtime in France is both protective for employees and demanding for employers. Mastering the calculation of surcharge rates (25% and 50%), respecting the annual contingent of 220 hours, exploiting available tax and social exemptions, and rigorously formalising collective agreements are imperatives that condition your company's compliance with labour law.

Dematerialisation plays an increasing role in managing these obligations: amendments, compensatory rest agreements, working time tracking documents — all these acts can be signed and archived securely and enforceably. Certyneo supports you in this transformation with an eIDAS-compliant electronic signature solution, specially designed for the needs of HR and legal teams.

Ready to secure your HR processes? Discover Certyneo's offers and start dematerialising your working time management documents today.