Required or expected overtime?

It may be a good idea to make clear to employees that they could be required to work overtime. This will usually be from time to time but could be a regular requirement if that applies. It should be done in an employees’ written particulars, section 1 statement, or written contract of employment (the document goes under differing names).

If you merely expect overtime, then the employee can refuse it – because you hadn’t made it a requirement. Such overtime could be regarded as voluntary.

It can be important to choose your words carefully, so they reflect your wishes. However, before you rush into making overtime a requirement consider the latest changes to holiday pay and its calculation.

You need to make a definite choice about your requirements/expectations because overtime, whether guaranteed or not, has to be taken into account in holiday pay calculations – unless the overtime is voluntary*.

So if you merely expect overtime from time to time, then it is voluntary, and you can escape adding it to holiday pay. Since overtime invariably attracts a premium, in most cases voluntary overtime will be taken up. However, to demonstrate its voluntary nature it would be helpful if employees do turn down overtime from time to time. It may even be worth creating such a situation if you want to save adding it to holiday pay. The risk is that your employees may hold you to ransom when you do really need them to work overtime!

Setting expectations was never easy.

*at the current date – October 2015

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