Although half of UK employees who did overtime last year received a premium of 10 per cent or more, 14 per cent reported that they were not paid any overtime at all in their main job, according to a report by the Resolution Foundation.
The publication “Time for time-and-a-half? Exploring the evidence and policy options on overtime” also found that these workers were typically doing five hours overtime a week, amounting to 1.5 billion hours of work annually. Most women and staff in wholesale and retail did not receive any significant uplift for their overtime hours.
The report attributes this failure to pay to the fact that employers are not legally mandated to do much about overtime in the UK, apart from abiding by the maximum 48-hour week set out in the Working Time Regulations.
In France, by contrast, firms with more than 50 employees have to draw up a code of conduct which includes hours during which staff cannot be contacted. The report suggests that employers who want their staff to enjoy a healthy work-life balance could at a minimum implement this kind of policy to challenge the culture that exists around out-of-hours working in the UK.
Even where overtime is paid, however, the report suggests that it is adding to income insecurity in circumstances where overtime working makes up the bulk of working hours. It can also put an unwelcome burden on people’s personal lives, particularly for those who are asked to work additional hours at short notice. The report therefore suggests that there should be protection for workers who turn down additional hours or action to discourage last-minute scheduling.
The report also points out, however, that changes to legislation affecting the rate at which overtime is paid may have unpredictable effects. For instance, while a premium may incentivise firms to shift towards contracts that better reflect the working patterns of their staff, some may instead choose to simply offer fewer total hours, resulting in lower weekly wages for some workers.
Given this uncertainty, the report recommends that the government pilot a range of overtime premia (between 10 and 50 per cent) in a handful of sectors. In addition, the pay threshold below which the policy should apply should be trialled. This could be linked to hourly wages or, as in the US, to annual wages.
Neil Todd, of Thompsons Solicitors, commented: “This report comes on the back of the “Unpaid Britain” report which found that £3 billion of British workers’ wages and holiday pay is withheld by employers every year, affecting at least two million employees. Too many workers are getting a raw deal and are not afforded a level of protection that they deserve.”
Read the Resolution Foundation report in more detail.