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Overtime pay

Rachel Sharp 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

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HR and legal information and guidance relating to overtime pay.