Overtime: When "compensated by the salary" is invalid
The clause "overtime is compensated by the salary" appears in many employment contracts – but it is often invalid. In that case, the overtime worked must be paid.
What applies as a general rule?
Anyone who works overtime is, as a general rule, entitled to payment or time off in lieu. Under § 612 BGB, remuneration is deemed to have been tacitly agreed if, given the circumstances, the work can only be expected in return for payment – which is regularly the case with working time.
Why blanket compensation clauses are often invalid
A clause that compensates all overtime in a blanket manner through the salary must, as a general term and condition, be measured against the transparency requirement (§ 307 BGB). According to the case law of the BAG, it is invalid if the employee cannot tell at the time the contract is concluded how much overtime can at most be demanded – the clause must be clearly limited.
- "Necessary overtime is compensated by the salary" – non-transparent and invalid, because it is unlimited.
- A valid clause states a specific upper limit (e.g. "up to 10 hours of overtime per month").
- For very high earnings above the contribution assessment ceiling, different rules may apply.
How do you prove overtime?
You must set out on which days and for how long you worked beyond the agreed time, and that the employer ordered, approved or tolerated the overtime. Keeping your own record with date, start and end time helps considerably.
Watch out for forfeiture periods
Many contracts contain exclusion or forfeiture periods, under which claims must be asserted in writing within a few months. Such periods may not fall below a certain minimum duration, but are otherwise valid – so act promptly.
How to check your contract
Look for "Überstunden" (overtime), "Mehrarbeit" (extra work) and "Ausschlussfristen" (exclusion periods) and check whether an upper limit is stated. An automatic contract check detects an unlimited compensation clause and the critical deadlines.
Relevant law
Frequently asked questions
As a general rule yes, unless there is a valid compensation clause. A blanket "compensated by the salary" clause without an upper limit is, according to BAG case law, usually invalid, so that the overtime must be paid.
That, according to the contract, no additional payment is made for overtime. If the clause is non-transparent because it states no upper limit, it is invalid and the overtime must nevertheless be paid.
Only within the scope of the Working Hours Act (on average no more than 10 hours per day) and only if the contract or an agreement covers it. An unlimited obligation is invalid.
Yes, if that has been agreed. Without an agreement, you are entitled to payment for the overtime that was ordered or approved.
Observe the exclusion periods in the contract – often three months. After they expire, the claims are forfeited, even if they were justified.
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General legal information based on your contract — not individual legal advice.