Do you know, what is overtime, what are its rules, what are the advantages and disadvantages of overtime work and how do salaried employees get overtime pay. Let us take a quick and detailed look in this article so that you can get complete knowledge about overtime, so let’s start
What is overtime?
So before going to discuss overtime salary, we have to know about overtime.
Basically, Overtime means any extra hours worked beside the contracted hours of employees. Working overtime is sometimes necessary when employees are approaching an important deadline, employees are absent .
What is overtime pay?
So, now we have to know about overtime pay or salary. Salary given for extra work beside the working hours is known as overtime pay. Employers, however, need to be careful and ensure they are paying at least the National Minimum Wage on average.
When does it become contractual?
Overtime, when undertaken, is always contractual. It should state whether overtime is compulsory or optional as well as detailing any relevant rates of pay. In contrast, if there is nothing discussed about overtime and its arrangements ,then they can’t force the employees to do overtime.
UK Overtime Laws: Pay and Rates
There is no need for a UK employee to do overtime, just as there is no need for an employer to offer additional hours.
There’s also no legal commitment to pay for working extra hours. But you had to take care that average salary pay for the total hours, the employee works do not fall under the national minimum wage.
Overtime rates depend on your company and industry. Whether you pay your employee for overtime or not depends on the contractual agreements that are in place.
In the US, there is a method to calculate the overtime pay for the employees known as the ‘time and a half’ system. In the UK, the amount of overtime pay is commonly called an overtime premium.
Also, you cannot force your employee to work more than an average of 48 hours per week as. This law is mentioned in the Work Time Directive 1998.
For the workers who are doing part-time, employers should pay overtime if they either:
- Work longer than full-time staff (and your full-time staff are paid more for these additional hours)
- Work unusual that is anti social hours (and your full-time staff are paid more for these anti-social hours)
Overtime Pay and Annual Leave
As we’ve mentioned, there’s also no legal obligation to pay employees for working extra hours. But, overtime puts an impact on the holiday pay of employees who regularly receive overtime, commission or extra bonus.
Legally, employers have to incorporate overtime into a minimum of 4 weeks of their annual leave pay. Employers can then decide whether to include this additional salary into the remaining 1.6 weeks of statutory annual leave, or to pay their basic rate. That part is up to you!
It might be hard to calculate overtime holiday pay if an employees’ overtime hours differ week to week. In this case, use their average weekly pay from the last 52 weeks.
You should also know how your salary will be paid if you remain absent for even a day? Because this often happens to everyone.
Time off in lieu (Toil)
Time off in lieu (TOIL), also referred to as “banked hours“, is the agreement that you’ll reimburse your employees for any extra hours with paid time off work.
Essentially, this means the employee agrees to bank their extra hours in order to use them for annual leave in the future.
Compulsory overtime and company policy
Depending on company policy, an employee only needs to work overtime if their contract states they must. In any situation, employers cannot tell their staff to work over 48 hours each week. Allowing one employee to work overtime means allowing all employees to work overtime.
All UK workers after the age of 18 are allowed one day off a week. Adult workers are authorized to a rest break of 20 minutes if they have to work more than six hours at a time. Alternatively, young workers cannot usually be made to work over 8 hours a day or 40 hours a week.
Advantage of working overtime
Some of the major benefits of working overtime are mentioned below:
- Promote a more flexible workforce
- Eliminate the need to recruit extra staff during employee absences or busy periods
- Give the chance to earn extra money if it is written in the contract.
Disadvantage of working overtime
Beside various advantages of working overtime, there are disadvantages too if the overtime work is so long and hectic. Some of the disadvantages are mentioned below:
- Health and safety issues
- Increased expenses
- Higher levels of absenteeism
- Lower productivity and work quality
Read to know: Should i give my Salary to my Parents?
How is it calculated and paid?
The rate of payments during overtime work are already mentioned in the contract. Contracts normally give this as an hourly rate. Calculate the overtime pay by multiplying the rate mentioned to the number of hours you had work overtime.
Until you decide on a good overtime calculating calculator, please feel free to look at out free overtime calculator in the meanwhile.
Frequently asked questions
In most cases, yes. Any company can tell you to do overtime work if it is already mentioned in the contract. Even if it does, they cannot force you to work more than an average of 48 hours per week. This is given in the Work Time Directive 1998.
The answer depends on what your contract says about it. If it is mentioned in the contract that you have to do overtime then refusing it can cause some serious problems and they can take some action against you. If it does not, then your employer cannot force you to work extra hours.
Conclusion
In summing up the entire discussion, we came to the conclusion that the topic of overtime pay and work is complicated and one has to calculate their overtime pay by using the right criteria. There are many benefits and flaws too of working overtime. We also have to know about how to calculate salary from hourly pay.
