Managing employee time in Estonia – legislation and tips
Estonian work-time legislation is largely similar to others in EU, due to numerous EU directives on the topic. This guide is meant as an easy look-up tool on attendance questions for both employers and employees alike.
The rule of Law
The main piece of legislation regarding employee attendance and time tracking is the Employment Contracts Act (Töölepingu seadus), often referred to as TLS. Estonian version, English version. Most of the information concerning attendance is located in the 3rd division (Working and Rest Time), starting with paragraph 42.
Estonian legal system is based on precedential law, so besides the actual legislation, you should consider possible court rulings, Labor Inspectorate comments and labour dispute committee decisions. It’s worth noting that Estonian Labor Inspectorate tries to be “the good guy” and offers help and guidance to both employers and employees. So, if you are uncertain about a contract or business practice – call or email them and ask for guidance.
Labour inspectorate also has a less pleasant habit of occasionally popping by for an inspection, reviewing a variety of things, including attendance practices.
Last, but not least, it is important to remember that Estonian legal practices and precedents clear mark employee as the weaker party. Which means that:
· Employers are strongly encouraged to enter maximum information about work terms into contracts. Employees are not supposed to be labour law experts.
· Any part of the employment contract violating the Employment Contracts Act is likely to be void, even if signed and agreed to by the employee.
If we build it, they will come
It is currently assumed that as of 1st of January 2019 all construction companies are going to be required to keep individual electronic worksheets. Main contractors will be responsible for having sub-contractors comply. This legislation is focused on combating several issues, most importantly:
· Effective wages in construction are lower than in most other sectors. This is believed to be due to unlawful compensation and part of the work hours not being registered.
· Construction norms often require specialists and supervisors to be present. Electronic registration of their whereabouts will verify that these rules are followed.
Several European countries are working towards taking these principles a step further and creating national “construction time banks”. These banks will later be integrated with data warehouse of Tax Boards for automated employment tax fraud detection. Next step will likely be the integration of national systems to synchronise data for construction workers abroad.
Time and attendance in Estonia in numbers
All of these points should either be reflected or followed in the employment contract.
· The regular “full time” work week is 40 hours, 8 hours a day. Employers may opt to make it shorter.
· You can employ children, who can work 12 hours a week, 2 hours a day. Older children can do 35-hour work weeks during school holidays. Do get written parental consent!
· Overtime should be paid at a 1.5x rate or compensated with time off. Many companies use summarised (aggregated) working time system, where overtime is tracked on a quarterly basis, rather than monthly. Overtime rules must be clearly stated in the employment contract. The employee has a right to refuse to work overtime.
· Work at night (22.00 – 6.00) is compensated at the 1.25x rate. UNLESS the employee is supposed to work night shifts according to their employment contract, then it is the regular rate.
· Work during public holidays is compensated at the 2x rate.
There are several rules for rest, which must be taken into account when scheduling:
· The summarised working time should not exceed 48 hours over a period of 7 days on average over 4 months. The period may be extended by a respective collective agreement, which is often the case in healthcare and seasonal businesses.
· There should be at least 11 hours of consecutive rest within 24 hours.
· There should be a weekly 48 hours of consecutive rest. If summarised working time system is in place, then it’s 36 hours.
Yes, those are a handful, but, fortunately, modern worksheet and work time management solutions, like Begin, provide built-in checks.
Office, factory and norms
The two most common types of employment are monthly and scheduled work. Besides the obvious differences, the biggest (and most problematic) aspect is figuring out how many hours an employee was supposed to work in a given month.
Normally, it’s calculated as a number of working days in a month * 8 hours. This number may change due to national holidays and shortened working days due to national holidays. For instance:
February 24th is the Estonian Independence Day (public holiday on Saturday). The previous working day must be 3 hours shorter.
There are 20 working days in February, making the “office” norm: 20*8-3 = 157 hours.
However, the employee that works on schedule and is NOT supposed to work on 23rd of February has a monthly norm of 160 hours.
This “monthly norm” affects the effective hourly rate, which in return affects the salary in case of sick-leaves, vacations etc. Also, workdays are used for some calculations, rather than work hours, but we will leave this topic for some other time.
As you can see, Estonian time & attendance structure is not that difficult, as long as you have a proper timesheet solution, like Begin, to help you schedule and track work time.