The most dangerous myth: hours-exempt means no need to clock in

False. Time tracking is mandatory for all employees without exception — including those exempt from fixed hours. Article 202 of the Portuguese Labour Code (Código do Trabalho) provides no exemption from time recording for hours-exempt workers.

Companies that do not record the working time of exempt employees are in breach of the law.

What working hours exemption is

Working hours exemption (Article 218 of the Labour Code) is a special arrangement in which the employee is not subject to the maximum limits of the normal working period — meaning they can work more hours without those hours automatically being considered overtime.

In return, they typically receive an additional allowance of at least 25% of their base salary.

Who can have working hours exemption

The law limits this to three categories:

1. Employees in management or senior positions with autonomous decision-making powers
2. Employees with genuine autonomy in organising their time — they manage their own schedule without supervision
3. Employees whose work cannot by its nature be subject to a fixed schedule — external work with clients at variable hours

The exemption must be stated in writing in the employment contract or in a separate written individual agreement.

What changes and what does not

What changes:

• No obligation to comply with a fixed schedule
• Extra hours on normal working days do not automatically generate overtime supplements

What does not change:

• Right to minimum daily rest (11 consecutive hours between working periods)
• Right to weekly rest (at least 1 day per week)
• Work on Sundays and public holidays is treated differently even with exemption
• Time tracking remains mandatory

What time tracking is used for with hours-exempt employees

For a regular employee, time tracking is used to calculate hours worked and overtime. For an exempt employee it serves to record days of presence and absence — and to confirm that minimum rest requirements are being observed.

This is also relevant when changing the schedule of an exempt employee — if the role changes and the exemption no longer makes sense, it can be revoked.

How to end working hours exemption

The exemption can be revoked by mutual agreement or unilaterally by the employer if the conditions that justified it no longer exist (e.g. the employee moves from a management role to an operational position). Revocation entails the cessation of the additional allowance and a return to normal working hours — with the implications that has for calculating overtime.

This article is for informational purposes only. For specific situations, please consult a qualified legal professional.