News & Insights

Overtime rules

Acas aim to reduce risk of foul play in overtime.

Overtime, for a considerable period, has been a contentious issue and a major talking point amongst employers, employees and commentators.

Acas have now produced a set of guidelines that should help provide clarity on the overtime issue. The guidance covers 5 key areas as follows:

Different types of overtime:

Voluntary – there is no obligation on an employer to offer overtime and no obligation on the worker to carry out the work if it is offered. A worker should not be subject to a detriment if they refuse overtime.

Guaranteed – an employer is contractually obliged to offer overtime and a worker is obliged to accept it.

Non-guaranteed overtime – overtime does not have to be offered by an employer but if it is offered the worker must accept it.

Time limits on how much overtime can be worked

All working hours, including overtime, are governed by the Working Time Regulations meaning a worker must not work for more than 48 hours per week (unless they “opt out”). A worker should receive 11 hours of uninterrupted rest in a 24 hour period and must also have a 20 minute break during any shift that lasts more than 6 hours.

Payment for overtime

Subject to minimum wage requirements, there is no legal right to receive an additional overtime payment. Further there is no obligation to pay overtime at a higher rate than normal pay.

The rate of overtime should be set out carefully in the worker’s contract.

Overtime for part-time workers

As with all issues regarding part-time workers there should not be any less favourable treatment than for full time workers. Therefore, if a full time worker receives additional or enhanced pay, a part time worker should receive the same amount after working the same hours. There is no obligation on an employer to pay a part time worker an overtime rate until they have worked the same amount of hours as their full time counterpart.

The impact of overtime on holidays

Potentially the most interesting element of the guidance is with regards to the impact of overtime on holiday calculations. We have reported on numerous court decisions on this topic that have indicated overtime worked should be included when calculating statutory holiday pay entitlement. Acas have confirmed this is the case but there is an exception if the overtime is worked on a genuinely occasional and voluntary basis.