There are times in the life of a business when staff are going to be required to work extra hours – if you have a rush of demand for your goods or services or during a staff shortage situation, for example.
In some industries it is common for employment contracts to stipulate that staff are expected to work a reasonable amount of extra time for no additional pay (this is commonly 15 minutes a day for manual workers; around an hour for supervisors or managers).
If there are no special provisions in an employee's contract, you must get their agreement to work overtime and generally pay them for the work they do. Employees can’t be forced to work overtime, unless their contract says so.
Even then, they cannot legally be made to work more than an average of 48 hours per week. An employee can waive their right to this restriction and agree to work longer – but this agreement must be in writing and signed by them.
If you want your employees to work regular overtime (or think you might in the future) this should therefore be stated clearly in their employment contracts. Other provisions which should be stipulated include:
Employers can stop their employees from working overtime, unless an employee’s contract guarantees it, but watch out you don’t breach discrimination law by, for example, preventing some employees from working overtime while allowing others to carry on doing so.
There are no minimum statutory levels of overtime pay and rates vary from business to business. An employee’s average pay for the total hours worked must not, however, fall below the National Minimum Wage.
Some rates may be fixed by an industry-wide agreement and some sectors expect employees to work overtime at their usual rate. Generally, it is up to you to agree overtime rates with your staff. Typical rates are:
Some organisations vary rates depending on how much overtime is done; eg, time-and-a-half for the first two hours and double time after that.
Some companies pay for travelling time if it’s for company business, as well as actual hours worked. Standby payments are often made too where employees are on standby to respond to any call outs. You may decide to pay at different rates for time on standby or pay a separate fixed allowance.
There are various issues connected with health and safety which you need to bear in mind when authorising overtime. These include:
Allowing employees to take time off in lieu (TOIL) is an increasingly common alternative to overtime pay, particularly among better paid or more senior staff. To make it work efficiently you should:
Unless a part-time worker’s employment contract says differently, you can demand that part-time workers work the normal full-time hours at basic rates before being entitled to an overtime premium. As soon as they have worked more than the normal full-time hours though, you must pay them the same hourly rate of overtime as a comparable full-time worker. You’ll also need to pay them more if you ask them to work unsociable hours for which you’d pay a full-time employee extra.
There are a variety of flexible working practices which can provide cost-effective alternatives to overtime, such as shift-work, flexitime, seasonal/ term-time working, and job sharing. Temporary or agency workers can be used to fill in where necessary or you may decide to contract some work out.
Warning: under the Agency Workers Regulation, if an agency worker has worked for the same employer for 12 weeks or more, they will be entitled to overtime in the same way a full-time worker would be).
Overview of employment rights (personal)
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