Investigation an overtime salary claim in a labor arbitration

Many employers or even lawyers engaging in labour law in a labor arbitration hearing are often unsure how, by what procedure, and by what applied rule of burden of proof will an arbitrator use to conduct an investigation into claims of overtime salary. This procedure only became clear to me after I became a labour arbitrator in Shenzhen.

Firstly, the arbitrator needs to investigate whether or not there is an unsettled overtime salary. As per the rule of the burden of proof, the employee has the obligation to preliminarily prove the existence of overtime, unless the employer admits that there is unsettled overtime salary whilst only disputing the amount. In the case that the employee successfully and preliminarily proves the facts that the burden of proof reverses to the employer which means the employer is obligated to prove there is no unsettled overtime salary.

Please note that the burden of proof shall reverse to the employer, if the evidence provided by both parties proves the fact of unsettled overtime salary, or the employer admits that there is an attendance record. The employer shall be obligated to provide counter-evidence, or the arbitrator shall support the employee’s claim fully or partially as per practice.

During the hearing process, the arbitrator shall also check in detail both parties’ other evidence.Such evidence can include reviewing whether or not there is a clause of overtime inclusive in the labour contract, if there are overtime hours or overtime salary in the salary slip, whether the slip is signed by the employee or if the calculation is right or faulty.

If the employee cannot prove the existence of overtime and the employer denies unsettled overtime salary, the arbitrator shall end the substantial investigation into the claim. Otherwise the arbitrator shall continue to investigate overtime hours, standard salary, overtime salary payable and paid overtime salary during the claiming period.

To continue with the above article, the arbitrator investigates further on an unsettled overtime salary case.

Firstly, employers need to know that the investigation shall focus on the claiming period and will review every part in the period to determine whether each part of the claim exceeds the limitations of arbitration. In cases where the employee is still employed, there is no limitation.

In a situation when the employment is terminated, the arbitrator shall investigate a 2-year period,starting 2 years prior to the date of case filling. While for the claim before it, the employee has the absolute burden of proof.

Next, the overtime salary payable during the claiming period shall be investigated. There are 2 factors to be considered:(1) the overtime base rate and (2) total overtime hours during the claiming period.These two factors determine the salary payable. Where the overtime salary base rate varies, the base rate shall be investigated on a month by month basis.

The overtime base rate can be normal working time salary, or it can be less than normal working time salary.When it is less than normal working time salary,both parties need reach an agreement beforehand, e.g. there is provision in labour contract or the salary slip proves it. When it is impossible to determine normal time working salary or agreed overtime salary base, the base can be determined using actual paid salary.

The arbitrator shall investigate total overtime hours in accordance with the relating rules. If the employee proves the existence of overtime during claiming period, or the employer acknowledges the employee’s attendance, the employer shall be liable to provide the attendance sheet/salary slip to prove the actual total overtime hours, or on the other hand,the employee’s overtime salary claim shall be supported based on rationality.

The arbitrator shall review in detail all evidence provided by both parties, such as the labour contracts, salary slips, attendance records and salary payment bank statements in order to investigate all the facts. Where the evidence is inadequate the arbitrator may request the party who is liable for the burden of proof to provide an additional submission of evidence, e.g. asking the employer to provide the attendance record. Finally, the unsettled overtime salary shall be equal to overtime salary payable minus paid overtime salary.