UK Overtime Laws

Understanding UK overtime laws and regulations is essential if you're running a business in the United Kingdom. Otherwise, you risk violating your employees' rights and having to pay penalties. 

Still, many business owners are confused about UK overtime laws and how to follow them, so this article will cover the most critical considerations and help employers stay compliant. 

UK Overtime Laws: A Summary  

According to UK overtime laws, overtime refers to working outside regular hours, predefined in the employment contract. 

This legislation also requires employers to clearly define overtime in their employment contract's main terms and conditions, so their staff knows what will be expected from them. 

However, given that employers can't be sure about the length, frequency, and exact timeframe of overtime work in many cases, they prefer to use general terms when setting out the rules in the contract. 

What Counts as Work? 

Before discussing UK overtime laws and how they apply, it's essential to define what counts as work. 

Besides performing regular duties, a working week also includes the following: 

• Job-related training 
• Time spent traveling for work purposes - for example, if an employee works as a sales rep and traveling is part of their job.
• Work lunches, such as business lunches 
• Working abroad 
• Paid overtime and unpaid overtime an employee is asked to do 
• Time an employee spends on call at the workplace 
• Anything defined as "working time" in the employment contract 
• Time spent traveling to and from the place of work at the start and end of the working day, but only if an employee doesn't have a fixed place of work. 

What Doesn't Count as Work? 

To clarify and prevent potential misunderstandings when calculating overtime for your employees, we should also mention what a working week doesn't include. 

Here's what's not considered work according to UK overtime laws:

• Breaks during which no work is done, such as a lunch break 
• Time spent commuting to and from work, at the start and end of the working day if an employee has a fixed place of work
• Paid and unpaid holidays 
• Time an employee spends on-call outside of the workplace 
• Unpaid overtime an employee volunteers for, for example, when they stay late to finish a task
• Sick days 
• Maternity, paternity, or adoption leave 
• Rest breaks
• Overtime.  

How Much Overtime Is Legal in the UK? 

UK overtime laws stipulate that employees can't be forced to work more than 48 hours a week on average, calculated over 17 weeks. 

There's no daily limit, and the 48-hour weekly limit includes overtime hours. 

All these provisions, set out in the Working Time Regulations 1998, practically mean that an employee can legally work more than 48 hours in a single week, but only if the 17-week average doesn't exceed this limit. 

Still, an employee may agree to opt-out of working more than 48 hours a week. In that case, the employer should write this kind of agreement and have it signed by the employee.

To ensure you stay compliant with UK overtime laws and within these limits, it's best to implement a time-tracking tool like Timeero. This way, you won't have to worry about your employees forgetting to clock in or out and exceeding overtime limits.

Notable exemptions

The Working Time Regulations recognize several exempt categories of employees as their job requires them to work more than 48 a week on average. 

These exemptions include:

• Security and surveillance workers
• Armed forces
• Emergency services and police
• Domestic servants in private households
• Seafarers and fishers onboard vessels on inland waterways
• Workers in sectors where 24-hour shifts are required 
• Executive and managerial positions for which measuring working time doesn't apply.

On the other hand, the 8-hour-a-day and the 40-hour-a-week limits apply to those under 18.  

There are also categories of workers who can't opt-out of the 48-hour working week, meaning they can't exceed this limit. 

Workers can't opt-out if they're: 

• Airline staff 
• Working in the transport industry 
• Staff traveling in or operating vehicles
• Security guards in vehicles transporting valuable goods. 

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How Is Overtime Calculated in the UK? 

Employers in the UK aren't legally required to compensate employees for overtime. 

Besides that, UK overtime laws prescribe no minimum statutory levels of overtime pay.  

In other words, they can set out the overtime rate or decide not to offer overtime pay to their employees. The only rule they should factor in is that employees' total income for hours worked doesn't drop below the National Minimum Wage. 

Suppose you want to offer overtime pay to your employees. In that case, you can choose among different models - single pay, double pay, or 1.5 time. But, again, the overtime rate you opt for should be clearly defined in the employment contract. 

Finally, instead of paying overtime, some employers offer time off in lieu (TOIL) of extra hours employees worked, that is, paid time off work in addition to their annual leave. 

In this case, the employment agreement should define when this time off can be used, the process for booking it, and what happens if the contract is terminated before the employee can use their earned days off. 

What Types of Overtime Are There? 

UK overtime laws recognize two types of overtime - voluntary and compulsory. 

Before we describe what these two types of overtime imply, it should be emphasized that employees have to work overtime only if that's what their employment contract stipulates. Otherwise, you can't force your employees to work overtime or terminate their agreement if they refuse to do so. 

Voluntary overtime 

Voluntary overtime means that employees don't have to accept your offer to work extra hours, while at the same time, you don't have to offer this. In the case of voluntary overtime, the employment contract has to stipulate that employees might be offered to work overtime. 

Employees can decide if and when they want to work overtime, and those who refuse shouldn't be treated less favorably or made to take pay cuts. 

Employers resort to voluntary overtime when understaffed due to a sudden increase in workload or too many employees on sick leave. 

Compulsory overtime 

According to UK overtime laws, compulsory overtime comes in two forms - guaranteed and non-guaranteed. 

Guaranteed compulsory overtime means that an employer is bound by contract to offer overtime to their employees, who, on their part, can't refuse it. This is the case when the employer knows on which days or in which seasons they will have extra workload, and they want to make sure all their shifts are covered in advance. 

If an employee whose employment contract contains a compulsory overtime clause declines to work extra hours, it will be considered a breach of contract. 

Non-guaranteed compulsory overtime means that employers might ask their employees to work overtime. If that happens, they have to accept it. However, the employer doesn't guarantee that this will be the case. 

For example, when an employer knows they will be busier during particular times of the year but can't precisely tell how much extra work they will need, they will write non-guaranteed compulsory overtime into the employment contract. 

An employer can't stop their employees from working extra hours if their employment contract guarantees overtime work. 

Also, employees shouldn't be discriminated against. For example, their employer shouldn't allow some employees to work extra hours and prevent others from doing so. 

Overtime Rules for Part-Time Workers  

UK overtime laws require employers to treat part-time workers in the same manner as full-time staff. 

This means that part-time employees will be paid their regular hourly rate if they work longer than defined in their employment contract. 

Part-time workers will be paid overtime in one of the following situations: 

• They work more than the predefined regular hours of full-time employees, and full-time employees would receive extra pay if they work these hours.
• They work at so-called unsocial hours, graveyard shifts, for which full-time staff would also receive extra pay.  

Calculating Holiday Pay 

According to UK overtime laws, employers should factor in overtime pay when calculating holiday pay for employees who regularly work extra hours. 

So, suppose an employee receives overtime pay (as well as commission and bonuses) regularly. In that case, employers should include all these payments in at least four weeks of paid holiday. 

Most workers in the UK are entitled to 5.6 weeks' paid holiday, statutory annual leave. Some employers might decide to include overtime pay, commission, and bonuses in the full statutory leave, although they're not required to do so. 

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Extra Pay for Employees Who Work at Night   

Although UK overtime laws don't regulate night work, this topic should be covered because employees who work unsocial hours are additionally protected by law. 

"Night-time" is generally defined as the period between 11p.m and 6 a.m., but an agreement between employers and employees can change this timeframe. However, this period has to last no less than 7 hours and include the hours between midnight and 5 a.m. 

Night workers regularly work at least 3 hours during the night-time most of their hours. 

According to UK overtime laws, night workers must not work more than 8 hours on average within each 24-hour period calculated over 17 weeks. However, if employees agree, this period can be extended to 52 weeks. 

This includes overtime, but only if it's regular. It should be said that an employee can't opt-out of this limit. 

As for the pay rate, while the National Wage Minimum applies to night workers, they're not entitled to a higher rate at night. 

Night workers whose job requires heavy physical and mental strain or includes special hazard can't be forced to work more than 8 hours within each 24-hour period. This isn't an average but an absolute limit, and it also includes daytime overtime. 

In other words, employers can't average out these night workers' working hours so that, for example, one night they work 10 hours and the next 6 hours. 

Exceptions to night-time working limits 

These night-time working limits don't apply to employees who work in the following fields:

• Executive and managerial roles 
• Armed forces, emergency services, and the police, under some circumstances
• Domestic servants in private households. 

Night-time working limits also don't apply in the following cases:

• If an employee has to travel long distances to get to work from home or when they regularly work in different places 
• For jobs in security and surveillance 
• In industries with busy peak periods such as farming, agriculture, or tourism 
• If there's an emergency such as an accident 
• The job requires 24-hour staffing, such as working in a hospital 
• In the rail industry.

For these exceptions, the period for calculating weekly night-time working limits is extended from 17 to 26 weeks. 

So, How to Stay Compliant with UK Overtime Laws? 

Suppose you want a motivated, productive workforce and avoid potential lawsuits and hefty penalties. In that case, you need to familiarize yourself with your employees' overtime rights and responsibilities. 

While it's true UK overtime laws don't require employers to pay overtime, you should still make sure you keep track of your employees' working time and compensate them adequately.