Overtime pay

Rachel Sharp Editor's message: Meeting short-term business needs through the use of overtime working allows an organisation to take advantage of the flexibility of the 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.

Employers should also be aware of the implications of recent case law on the issue of how overtime should be treated in the calculation of holiday pay.

Rachel Sharp, HR practice editor

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