Fixed Monthly Compensation

The employer and employee may agree upon a fixed monthly compensation for any additional, overtime or Sunday work undertaken, instead of compensating for each such hour worked separately. The monthly compensation can only be paid if there is a written agreement between the employer and the employee. It can be agreed on the contract of employment or on a separate agreement and the agreement should include the amount of monetary compensation as well as an estimate of the total monthly overtime working hours.

However, the agreement of a fixed compensation can only be done in respect of employees working as senior officials, managers and employees who work flexible hours. The possibility to agree upon a fixed monthly compensation has in certain collective bargaining agreements been extended to apply also to certain other employees with official duties.

When a fixed monthly payment has been agreed upon, the employee is always paid that sum as compensation for any additional, overtime or Sunday work, irrespective of the actual amount of such work undertaken during the relevant month. The employer ought to consider fixed monthly payments in circumstances where overtime and weekend work is frequent, as it for instance simplifies the calculation of salaries.

An agreement of a fixed monthly compensation can be terminated to end at the end of the next period of payment. It’s also possible to agree on a different length of term of notice but it’s not possible to agree on that the agreement couldn’t be terminated at all.