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Overtime Laws

by Peninsula HR

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Occasionally, employers may require staff to work in addition to their contracted working hours – commonly known as overtime.

This provision should be clearly laid out in the main terms and conditions of each employment contract. As the exact nature of overtime in terms of length and frequency cannot always be anticipated, employers often express the possibility of working overtime in general terms in order to retain the most flexibility.


Employers are also free to set terms around payment of overtime as they wish, provided they comply with national minimum wage law. Overtime may therefore be paid at single time, double time, time and a half etc. – this is the final decision of the employer and should be clearly stated in the employment contract.


Employee rights


Unless a clear overtime policy is included in the employment contract, an employee is not legally bound to work outside of their contracted working hours.


Overtime hours must also be included in the calculation of maximum working hours, which is an average of 48 hours per week, usually calculated over a 17 week period. If employers require their employees to work more than this, the employee must sign an ‘opt-out’ agreement, but they must not be pressured into doing so.


Overtime and holiday pay


It is important to be aware of the specific distinctions between different types of overtime when it comes to calculating holiday pay.


After a recent case law judgment, an employee who consistently works overtime should now accrue additional holiday pay. This only relates to non-guaranteed overtime that is not expected but, when offered, the employee is required to do it.


The law behind overtime


The Working Time Regulations Act 1998 details the legislation regarding maximum working hours per week.


See the case of Bear Scotland v Fulton which decreed that non-guaranteed overtime hours should be factored into holiday pay.

Summary

• Details of overtime policy should be agreed by the employee in the initial terms of their employment contract.
• An employee can work a maximum 48 hours per week on average; anything beyond this requires a written agreement from the employee.
• As long as the employer is meeting the necessary minimum wage requirements, they are free to decide what rate of pay the employee is due for working overtime.