Manage overtime

Using overtime successfully

For many businesses, overtime is a useful way of dealing with fluctuations in demand or coping with production bottlenecks. However, where it is used excessively it can be an expensive and inefficient way of organising work.

Where needed, ensure there are managers or supervisors in place, for example to make sure that health and safety regulations are being followed.

Regulations on working time:

• Limit maximum weekly working hours and set minimum daily and weekly rest periods. See our guide on hours, rest breaks and the working week. If necessary, you can ask employees, but not young workers, to sign individual agreements opting out of some of the regulations. Do not pressure them to do so - they must willingly agree.
• Restrict night-work shifts to eight hours daily, including overtime, and offer health assessments to night workers. See our guide on Sunday working and night working.
• Set minimum paid annual holidays. See our guide on how to know how much holiday to give to your staff.

To help guard against any excessive overtime, many employers:

• monitor overtime levels to identify areas where it could be reduced
• watch out for instances where overtime working becomes regular and unvarying
• limit the overtime employees may work over a given period
• reduce basic working hours, eg from 40 to 38 and ensure that employees work the first two hours of overtime at flat rate
• enhance employees' annual earnings or basic hourly rate, or pay them a lump sum, to compensate for the loss of overtime

Subjects covered in this guide

• Introduction
• Overtime and employment contracts
• Health and safety issues
• Pros and cons of overtime
• Part-time employees and alternatives
• Using overtime successfully
• Time off in lieu
• Here's how I manage working hours to control costs and avoid unnecessary pressure on staff

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