If, like many businesses at present, you are operating with reduced staffing, you may be in a position where you need to ask your current employees to work overtime.
Overtime for employees can be a mutually beneficial arrangement. It can also work out to be more cost-effective than hiring more staff, providing that it is managed well.
So how should you go about this, and do employees have to oblige?
Can employees refuse overtime?
Overtime may be compulsory or optional. If there is a requirement to work above normal contractual hours this must be set out in employment contracts. If you do not have a compulsory overtime policy written into your contracts, an employee may choose to accept or decline the overtime.
An employee should not be treated less favourably for declining optional overtime. For example, be mindful of those with other commitments, such as childcare responsibilities, to avoid a risk of sex discrimination. It’s worth remembering that even if overtime isn’t compulsory, some people will still gladly accept it to top up their wage, especially in the current climate.
That brings us onto another common question on the subject.
Do I have to pay employees for overtime?
This must also be set out in the contract and although technically you do not have to pay employees for working overtime you must ensure that their average pay for the total hours they work does not fall below the national minimum wage.
An alternative to paying overtime could be to allow the employee to take the time back elsewhere. This is known as time off in lieu (TOIL). You would need to set rules about how this is taken. For example, if TOIL builds up over a long period and is added to booked holiday it may cause operational problems.
Make sure that this is clarified ahead of time, as some people may automatically assume that they get paid, and at a higher rate, for working overtime. All terms, including how overtime is recorded and the rate of pay, should be agreed before overtime begins.
Keep in mind too that if overtime is contractual, you need to include it in holiday pay calculations.
What if an employee works overtime without permission?
Unauthorised overtime is when an employee works outside of their contractual hours without your prior agreement. This is why the terms and rates of pay for overtime need to be clear and unambiguous.
Some employees stay on after their hours because of a culture of presenteeism, where being present at their desk when the boss goes home is thought to be necessary. This is counterproductive and leads to stress and exhaustion. It’s important that you remain aware of employees working overtime so that you can maintain health and safety.
Is there a limit on overtime for employees?
The Working Time Regulations (WTR) 1998 govern working hours in the UK. When arranging overtime for your employees, you must ensure that you remain compliant. Employees shouldn’t be working more than 48 hours in a week – usually averaged out over 17 weeks – unless they have specifically opted out. You’ll need an opt-out to be in writing and signed by the employee.
Rest breaks also come under the WTR. Employees should take 20 minutes break away from the work station when working longer than six hours, and have 11 hours rest between working days. They must also have one day off a week or two days off a fortnight.
The rules are different for workers under the age of 18, so if you employ school leavers, make sure you are aware of their extra rights.
Finding more time for yourself
If you are working overtime trying to balance staffing with pay calculations and other important areas of your business, don’t forget that we are only a phone call away and can help you to recover some much-needed lost time.