Overtime - key considerations


28 May, 2010

Many businesses often use overtime working as a way of coping with changes in demand and increased workloads. Whilst this can be mutually beneficial to both businesses and employees there are certain legal implications that need to be carefully considered.

  • It is important that overtime working is dealt with properly in contracts of employment. There is no obligation on employees to work any more hours than as stated in the contract unless this is specifically mentioned. However, this can be resolved if the employee voluntarily agrees to it beforehand.
  • The contract should also deal with whether employees are entitled to pay for overtime. You will often hear that employees are paid 'time-and-a-half' for overtime, but there is actually no legal right to extra pay for working additional hours. There is also no statutory minimum level of overtime pay, but businesses must be careful that when averaged out over the hours worked, the rate does not fall below minimum wage. An alternative to paid overtime is to offer time off in lieu.
  • A key issue to consider is the amount of hours employees work. Under the Working Time Regulations most workers cannot be made to work longer than an average of 48 hours per week. It is possible to 'opt out' of this maximum working week. This must be voluntarily agreed in writing and must allow the worker to terminate it.
  • When working additional hours employers must also ensure that the employees are given the appropriate breaks both in work and also rest breaks out of work. There are special rules that apply to workers in certain sectors and so it is important that these are checked carefully before considering whether to use overtime. If employers are found to be in breach of any of the provisions then they could face an Employment Tribunal claim and this may also be classed as a criminal offence.
  • Employers must ensure that there is no element of discrimination by letting some employees work overtime and not others, whether this be on the grounds of sex, race, religion or age. It is also crucial that part-time workers are treated in the same way with regard to overtime as their full-time counterparts.
  • There are also health and safety considerations for overtime. Long hours can often lead to fatigue which can be dangerous particularly if this involves using dangerous or heavy machinery. Overtime can also mean that employees work alone which will not be suitable in all working environments. It is crucial that adequate risk assessments are completed prior to allowing overtime work.

Overtime work on occasions is useful but if employers find that this is more of a regular occurrence then this can be expensive and could have implications on the wellbeing of staff. If businesses find themselves in this situation it may be worth considering using other forms of flexible working or to take on temporary or agency staff.

For further information please contact Employment Solicitor Amy Stokes on 01254 222399 or contact Amy Stokes by email.


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