Overtime

An employment contract usually specifies fixed working hours. Overtime is any time spent working in addition to these basic hours.

Overtime can be compulsory or voluntary. It may be paid or not.

The Working Time Regulations apply to all work performed, including overtime.

Unless the employee voluntarily agrees to opt out, generally, he or she should not be asked to work more than 48 hours per week. There are exceptions depending on the type of work being carried out and the age of the employee.

Voluntary and compulsory overtime

Working overtime may be part of the business culture. For example, there may be a general expectation (but no obligation) that an employee should arrive slightly earlier and leave slightly later he or she is contractually bound.

The other common situations where an employer may ask for overtime to be worked are:

  • where demand for the business’ goods or services is unusually high or there is a tight deadline to be met and there is a need for hours to be increased to deliver

  • where there are short-term staff shortages (for example, several employees are sick at the same time) and the remaining staff need to cover these absences

Whether overtime is classed as voluntary or compulsory depends on whether the employer must offer it, and whether the employee must accept it if offered.

Voluntary overtime is where neither the employer nor the employee has any obligation.

Because the worker has no obligation if the work is offered, he or she should not be treated unfairly or less favourably if he or she chooses not to accept it.

Compulsory overtime may be guaranteed or non-guaranteed.

Guaranteed overtime is where an employer is contractually obliged to offer the additional work, and the employee is contractually obliged to accept it.

Non-guaranteed overtime is where the employer is not contractually obliged to offer additional work, but the employee must accept it if it is offered.

For either party to be contractually bound, there must be a clause within the employment contract.

Pay and benefits

Paid overtime is usually only given to workers who are paid by the hour. The rate is usually specified in the employment contract as multiple of the hourly rate. For example, it may be 1.5 times the normal hourly rate, or 2 times.

There may be a minimum amount of time that needs to be worked before overtime becomes payable. For example, an employee may be required to work an additional hour before being paid for that hour.

An employer does not have to pay a higher rate of pay for overtime, although enhanced pay is usually used as an incentive.

If an employer doesn’t offer a greater pay rate for overtime, it should ensure that the hourly rate does not drop below the National Minimum Wage level.

As an alternative to paying overtime, an employer might offer time off in lieu to employees who have worked more than their contracted hours. The possibility of this arrangement should be stated in the employment contract, including details about when leave can take be taken, the process for arranging it and what happens if employments ends before the time has been taken off.

Many employee benefits, including holiday and holiday pay entitlement depend on total hours worked, which includes all overtime. However, all overtime may not be taken into account. Small amounts of extra time worked, such as an extra 15 minutes at the end of most days, and time on an occasional or infrequent basis would not be recorded, and therefore not be taken into account.

Of course, most employees have enough goodwill towards their employer to consider occasional or small amounts of overtime to be simply part of the job.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
  • Does not create a contractual relationship;
  • Does not form part of any other advice, whether paid or free.
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