Overtime is part of everyday life in many Austrian companies – and with it the question of whether all-in salaries or overtime allowances actually cover what employees do in terms of extra performance. This is exactly what the coverage check checks. Legally, an annual observation period is generally sufficient for this. In practice, however, it has been shown again and again that those who only look at the end of the year often experience a nasty surprise – in the form of high back payments, tedious individual case reviews or unpleasant conversations with employees who rightly demand their money.
The monthly coverage check – implementation and tips
In operational practice, a different approach has prevailed than the annual one: the ongoing, monthly coverage review. For good reason – we show you what you need to look out for:
1 – Time tracking and payroll accounting must work together
A coverage check is only as good as the data on which it is based. Without clean, complete working time records, it is not possible to reliably determine how much overtime has actually been worked – and without this figure, the entire audit lacks a basis. It is therefore crucial to ensure a smooth, preferably automated transfer of time recording data to payroll accounting. Only if these two worlds really interact can the coverage check be carried out at all – and the ongoing mapping of overtime in the payroll is correct from month to month, instead of having to be laboriously reconstructed at the end of the year. Anyone who operates time recording and payroll accounting as separate worlds and transmits data manually or not at all creates unnecessarily large construction sites here.
2 – Overtime is charged as it is actually paid
A detail that is often underestimated in practice: What counts for the coverage check is not what would theoretically be possible in terms of overtime, but what is actually paid out in overtime pay – including the correct basic hourly wages, overtime dividers and bonuses according to the collective agreement. This is exactly where the advantage of the monthly analysis becomes apparent: fluctuations between individual months – such as a particularly work-intensive March followed by quieter summer months – can be kept in view at all times, instead of only being processed in a single, complex comparative calculation at the end of the year. This not only reduces the computational effort at the end of the year, but also makes undesirable developments during the year immediately visible, so that countermeasures can be taken in good time.
3 – All-in contract or flexitime – what counts as overtime anyway?
One of the biggest sources of error in practice lies in the clear distinction between real overtime and flexitime hours. With flexitime models, it is normal for employees to work more or less and build up time credits within a calculation period – as long as these credits remain within the agreed framework, it is not yet overtime in the legal sense. Only time credits that exceed the flexitime frame or are ordered by the manager and can no longer be compensated within the bandwidth are to be treated as real overtime and are therefore relevant for the coverage check.
For all-in employees with flexitime agreements, this means that the two systems must be neatly separated and still thought of together. If this distinction is not clearly made, in the worst case regular flexitime hours end up in the overtime pot – or, conversely, overtime that is actually to be paid is lost in the flexitime balance. Both lead to a distorted coverage check that can be challenged in the event of a dispute.
Conclusion: Check monthly instead of trembling at the end of the year
The coverage check is not an annoying mandatory program for the annual financial statements, but an instrument that, if used correctly, creates legal certainty for companies and fair pay for employees. If you do it monthly instead of just annually, you benefit from timely, correct data, detect deviations at an early stage and avoid expensive additional payments and discussions afterwards. The prerequisite for this is a clean interplay between time recording and payroll accounting as well as a clear distinction between flexitime and real overtime.
This is exactly where we come in: With our software for time recording and payroll accounting , we ensure that your data flows consistently and correctly – and with our payroll accounting and consulting expertise, we are happy to support you in regularly and legally compliant checking your all-in agreements and overtime allowances. Contact us if you would like to put your coverage check on a solid, ongoing basis.
