Editor's message: Meeting short-term business needs through the use of overtime working allows organisations to take advantage of the flexibility of their workforce without the need to take on additional staff.
Employees who work overtime do not have an automatic right to any additional pay; this will depend on the terms of their contract of employment, or on custom and practice. But where there is a premium attached to overtime working, employees can see this as a welcome enhancement to their basic salary.
Employers usually define rates of overtime pay as a multiple of regular or normal pay; other methods include a set hourly rate for overtime or a higher salary to recognise an element of overtime.
Where your organisation makes use of overtime, you need to be aware of the implications of recent case law concerning the inclusion of overtime pay in the calculation of holiday pay.
Rachel Sharp, HR practice editor
One in 10 workers did paid overtime in the UK in the past year but only a fifth received "time and half" or more for working those hours.
We discuss the legal implications for employers of the recent EAT decision in Dudley Council v Willets and others, which establishes that regular voluntary overtime is included in holiday pay calculations.
The Employment Appeal Tribunal (EAT) has held that entirely voluntary overtime should be included in normal remuneration for calculating holiday pay.
Payments for purely voluntary overtime should be included in holiday pay if they are regular enough to constitute "normal pay", the Employment Appeal Tribunal (EAT) has confirmed.
An employment tribunal has held that ambulance workers' non-guaranteed overtime in respect of "shift overruns" should be included in the calculation of their holiday pay, but that on the facts of this case purely voluntary overtime does not have to be included.
An employment tribunal has held that payments for purely voluntary overtime should be included in holiday pay.
We examine overtime working arrangements and pay rates in our 2016 survey.
Updated to reflect that the new national pay scale is in force from 1 April 2017.
HR and legal information and guidance relating to overtime pay.