Do you have to pay employees for overtime?

Do you have to pay employees for overtime?

One of your employees is querying their latest pay as they say they worked extra time when covering for their manager. Do you have to pay them overtime in this situation?

Overtime – what’s the law?

There’s no statutory requirement for a UK employee to work overtime , just as there’s no statutory requirement for an employer to offer additional hours. There’s also no legal obligation to pay employees for working extra hours. However, you must ensure that the average pay for the total hours the employee works does not fall below the national living wage (NLW) or national minimum wage (NMW) if they’re under 23.

No minimum. Additionally, apart from ensuring that the employee’s average pay is at least the NLW/NMW, there’s no minimum statutory overtime amount that you must pay. Overtime rates will often depend on your company and industry. Whether you pay your employee for overtime or not depends on the employment contract.

Remember, you can’t force your employee to work more than an average of 48 hours per week. This law is stated within the Working Time Regulations 1998 . Employees can agree to work longer, but there must be a signed written opt-out agreement

What have employment tribunals said?

In Fitz v Holland and Barratt Retail Ltd , Fitz (F) initially worked as a part-time sales associate for Holland and Barratt and was later promoted to the role of supervisor. Part of his new duties involved covering for the store manager when the manager was not there. This meant working outside his contractual hours for no pay, e.g. opening and closing the store, sweeping up and cleaning the refrigerator. Over a period of time, he racked up an additional 200 hours of unpaid work. F’s contract did not say he was expected to work additional hours so it made no provision for paying him for extra hours worked. However, Holland and Barratt did have an overtime scheme under which workers were paid extra for working additional hours. F eventually resigned and claimed unlawful deduction of wages for the extra hours worked.

Tribunal finding. The employment tribunal found that there had been an unlawful deduction of wages, but only in respect of the time spent opening and closing the store. This, by its nature, had to be done outside his contractual hours. The other work, such as sweeping and cleaning, could have been done within his contractual hours, so his claim failed in that respect.

This case highlights the problems you could face if you have employees undertaking additional duties for which they are not paid. To avoid any legal issues or confusion, make sure your employment contracts specify whether additional hours are paid and at what rate. That way, when you get a query from an employee regarding overtime pay, you can refer them to the contract.

You don’t have to pay overtime providing you check that you will still be paying the employee at least the hourly national living or minimum wage rate when those extra hours are factored in. To avoid confusion, if employees have to work additional hours to get their job done ensure that their employment contracts specify whether those additional hours are paid and at what rate.

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