ACAS has published new guidelines on overtime which can be found here: ACAS Overtime GuidelinesThe new guidelines confirms what overtime is. They further detail what is classed as voluntary, guaranteed and non-guaranteed overtime, as well as detailing limits on hours worked and the calculation of pay for overtime worked and holiday pay. The main changes are summarised below.
Guaranteed/non–guaranteed overtime – compulsory overtime
The guidelines make clear that it is important that where an employer wants to rely on either guaranteed or non-guaranteed overtime this should be clearly set out in the employees terms and conditions of employment particularly where the employer wants to say that any overtime is compulsory.
Where an employee refuses to work overtime that is compulsory, then this could be a breach of contract. The employer could rely on this breach to bring the contract of employment to an end or impose other disciplinary sanctions against the employee.
Is there a limit to the amount of overtime that can be worked?
Employers and employees are reminded that the Working Time Regulations 1998 govern the number of working hours that an employee can work and what rest breaks an employee must have. There are also strict hours for employees who drive as part of their role.
Payment of wages for overtime
There is no right to extra pay for overtime worked, unless it is specified in the contract of employment. Normal rates of pay therefore apply which must be at least the national living or minimum wage whichever is applicable.
Time off in lieu can be given for overtime worked.
Where a part-time worker works overtime they should not be treated any less favourably than full time workers. This means that if full time workers get enhanced pay for overtime, then so should the part time worker once they have worked the same number of hours expected of the full time worker.
Holiday pay calculations
These should include overtime worked by the employee, unless the employer can show that any overtime worked is genuinely occasional and infrequent. This is quite difficult to do and should be the exception, not the rule. Anyone wishing to rely on this for not including overtime in holiday pay calculations should take advice.
If you have employees working overtime at any point, you should ensure that your contracts of employment and/or company handbooks specify the rules relating to this. Our Employment Team can help you ensure your contracts of employment meet the needs of your business and employees, as well as ensuring that if you need your employees to work overtime that they are also aware of the rules.