Voluntary overtime is where there is no obligation on an employer to offer overtime and no obligation on the worker to do overtime if it is offered. An employee should not be subject to any detriment for turning down voluntary overtime.
Guaranteed overtime is overtime that an employer is contractually obliged to offer and an employee is obliged to accept.
Non-guaranteed overtime does not have to be offered by an employer. However, when it is offered, the employee must accept and work it.
If you want to rely on either guaranteed or non-guaranteed overtime you should clearly detail in the terms and conditions of employment that the overtime is compulsory.
If an employee refuses to work overtime they are obliged to work, the employer may view this as a breach of the contract and proceed with disciplinary action.
Pay when working overtime
There is no legal right to receive any additional payment or be paid at a higher rate for any overtime worked.
An employer should clearly state in the employee's terms and conditions of employment what, if anything, will be paid for working additional hours.
While overtime may be worked for no additional pay, an employee's hourly rate must not fall below the National Minimum Wage
for the total period worked.
Overtime for part time employees
Part time employees should not be treated less favourably than full time employees. If a full-time employee receives extra or an enhanced rate of pay for overtime, a part time employee should receive the same rate of pay after working the same number of hours.
Unless the contract says differently, there is no obligation on an employer to pay a part time employee an overtime premium rate until they have worked the same number of hours as their full-time counterpart.
Impact of overtime on holiday calculations
This is the most recent change following court decisions. The decisions indicated that all overtime worked should be included when calculating an employee's statutory holiday pay entitlement. The only exception to this is overtime that is worked on a genuinely occasional and infrequent basis.
These court decisions apply to the first four weeks of annual leave which are required under European law.
It is recommended that you examine your current contract details regarding overtime arrangements and holiday pay practices to ensure they meet both business and legal requirements.
For more information, speak to a member of the HR Consultancy team who will be able to give you support calculating holiday pay
and advise on contract terms.
Written by Melanie Darlington
Senior HR Consultant