Working Overtime

A Guide to Working Overtime

When businesses fall behind on projects or deadlines, they often present the notion of working overtime.

However, there are specific legal and moral requirements needed before initiating this. It’s not as simple as asking employees to stay behind and work longer than normal. One bad move and you could end up breaching contracts and legislation.

Let’s take a look at what working overtime means, what the law covers, and how to manage it in a compliant manner.

What is working overtime?

Working overtime is when an employee works beyond their normal contractual hours.

They’ll either work overtime voluntarily or involuntarily. For example, if they’re contractually obliged to work overtime once a month. Or, if they’ve been asked to help out during an unexpected busy period.

The rules on hours and pay vary when it comes to overtime work. That’s because it depends on what type of work is being done, how many extra hours are needed, and what the pay rate is.

If you plan on initiating overtime, it’s important to adhere to the law. Employers should also be sympathetic when it comes to taking efficient rest periods or having commitments outside of work. If not, you could end up losing valuable and talented staff.

What are the advantages of working overtime?

There are countless reasons why companies offer overtime. Let’s take a look at a few examples:

  • Need more time to reduce or complete the workload.
  • Missed the deadline for a certain task or project.
  • Currently low in staff numbers.
  • Helping employees earn more money.
  • Dealing with unforeseen business issues.

What are the disadvantages of working overtime?

Whilst the benefits may seem attractive, you can ignore the downsides to working overtime. For example:

  • Lead to potential health, safety, and welfare issues.
  • Need to budget for greater expenses.
  • Face an increase in absences (due to ill-health).
  • Employees feel obliged to work despite personal matters.
  • Could impact the quality and quantity of output.

Are you obliged to work overtime?

In the UK, there isn’t a specific law that outlines the rules on working overtime. Instead, employers need to refer to legislation relating to work hours, pay, and wellbeing.

An absence of legislation means employees aren’t legally obliged to work overtime. Meaning, you cannot force them to work more than 48 hours per week – regardless of whether they have a written or verbal contract.

This is outlined under the Working Time Regulations 1998. If an employee agrees to work more hours, they must sign an agreement to ‘opt-out’ of this right. (They also have a legal right to defer back to the maximum weekly limit).

Are you obliged to pay overtime work?

There is no law on how overtime works when it comes to payment. Meaning, employers aren’t legally required to pay for overtime hours. However, it’s very unlikely that employees will work for free!

Many businesses will pay their staff to work overtime. And they’ll usually offer one of three options as payment:

  • Statutory minimum wage rate.
  • Normal hourly rate.
  • Additional pay on top of their normal hourly rate.

A very common practice used by businesses is paying ‘time and a half’. How to work out overtime pay here is simple. The employee is paid their hourly rate plus an extra half – for every hour of overtime they complete.

However, many hours you offer as overtime, the average pay for the total hours must not fall short of the National Minimum Wage rate. If it does, you could be forced to pay back missing wages with compensation on top.

Do you get extra holidays for working overtime?

In the UK, employees can receive extra holidays for working overtime. From 2017, any employee who works regular overtime must have their hours included in their holiday pay and other compensations (like commission or bonuses).

Employers have a legal duty to calculate overtime hours into a minimum of four weeks for holiday pay. You can then choose to either pay their basic hours rate or amend it accordingly.

Since 2022, holiday pay for part-time workers who work overtime is based on the last 52 weeks worked. Employers are still legally obliged to apply the same overtime pay rules for both full and part-time employees.

How to manage employees working overtime

Now that we’ve looked at the benefits and laws, it’s up to you whether overtime will work in your business. If you do, here are a few steps to consider:

Outline your overtime terms

The first step you need to take is to outline your terms for working overtime. Include them within your company policies and handbooks so all employees have access to them.

It’s also a good idea to include them in employment contracts, even if certain employees won’t be asked to do overtime. Run this by your HR department to ensure your terms are lawful.

Keep track of all overtime hours and pay

Employers must keep track of all overtime hours and pay. This includes calculating how many hours individuals complete; as well as paying them accordingly. Remember, you cannot pay them less than the National Minimum Wage rate.

It’s also important to keep on top of any work benefits employees are entitled to. For example, commission pay, annual leave, bonuses, or other entitlements agreed to within their contracts.

Care for their wellbeing

Remember, employees who work regular overtime will be more tired than normal. So, make sure you care for their wellbeing as best as you reasonably can.

Make sure they’re taking breaks in accordance with their overall working hours. Some may legally be entitled to longer breaks depending on how many overtime days they’ve worked.

Be aware of presenteeism

Presenteeism is when an employee works despite being ill or sick. They may feel they can’t afford to miss out on overtime pay; or believe productivity will be affected if they don’t attend work.

Employers must ensure their staff are physically fit enough to work. Make sure people are eating and resting well. If a sick employee is worried about losing out on extra wages, send them home with the promise of making up lost hours.

 Love2shop can help you reward hard-working employees

When it comes to overtime work, employers must keep on top of hours, pay, wellbeing, and work benefits. If it’s done well, your productivity levels will sky-rocket – along with your revenue.

When employees are taken care of well, it leads to work satisfaction and engagement. Why not reward their efforts through Love2shop’s customer loyalty schemes? We guarantee there is a gift or incentive that’s suitable for all your hard-working overtimers.

How work Christmas celebrations can add to financial stress

Christmas is typically an expensive affair – presents, extra food, parties, not to mention heating bills in one of the coldest months of the year.

Unfortunately, well-meaning employers can add to the burden with events and activities designed to be fun but which put even more pressure on people’s finances.

According to research from experience booking platform Fizzbox, the average cost per person of the work Christmas party in 2023 will be £52.69 per person. That’s 3% higher than last year.

The traditional Christmas ‘do’ was once a few drinks in the office paid for by the business. Today a meal at a nice restaurant is the bare minimum for most. Generous employers might foot some or all of the bill, while others expect staff to dip into their own pockets.

But regardless of how much (or little) the company contributes, that is not the end of the spending for employees. There are additional costs, whether that’s a new outfit, a hairdo, the cost of taxis or even, if they live further afield, the cost of a night in a hotel.

The price of fun

Women’s fashion brand Oasis has published research showing that the average woman will spend £281.78 on the Christmas work celebrations.

Almost everyone surveyed said they bought new clothing accessories at an average cost of £139.23. Transport costs came to £27.55 with accommodation adding £61 to the bill.

And it isn’t just the Christmas party. Secret Santa, where you buy gifts for colleagues, is also increasingly common in workplaces across the country.

On average people spend £12 on Secret Santa gifts, but according to financial website The Motley Fool, Brits throw away £32m worth of those gifts every year. That adds up to just over 2.5m individual gifts. It is a huge financial waste in the midst of a cost of living crisis.

Throw in the pressure of taking part in Christmas jumper days and other seemingly small festive outlays and it’s easy to see how Christmas fun can become a challenge for people already struggling to make ends meet.

Gifts that matter

Employers can help their teams celebrate at Christmas without the added expense however. In fact, with a little thought we can actually make the festive season a little less financially stressful!

Multi-retailer gift cards from Love2shop allow you to give your employees the gift of choice. Those who want a get-together can meet up and use their gift cards in one of the restaurants or bars that accept Love2shop, while those who are feeling the pinch financially can put them towards gifts or food for Christmas.

And there’s a benefit to employers too. Giving gift cards up to the value of £50 per employee can be done tax-free under HMRC’s Trivial Benefits provisions – reducing both the cost and the admin work giving bonuses through payroll can create.

You can see the savings for yourself using our Tax-Free Gift Calculator tool.

Benefit of kindness

Love2shop is one of the best known gifting brands in the UK. Offering gift cards, contactless gift cards, e-gift cards and vouchers, Love2shop products are accepted by more than 150 retailers including Marks & Spencer, Iceland, Matalan, Argos, Costa, Harvester, Tui, Jet2Holidays and more.

It recently published its Employee Value Report 2023 which found 90% of UK employees said a surprise gift of a multi-retailer gift card would make them feel more valued. In addition, 57% of people said days off, multi-retailer gift cards or flexible working are the best workplace rewards, all benefits that help people manage their spending and ease their everyday stress.

The report also found 34% of people given a multi-retailer gift card would spend it not on treats, but the weekly shop.

Giving a reward that has a practical impact on their lives increases employees’ sense of value. It shows them you understand the pressures they are facing – even if they have not shared that with you – and that you want to support them. It makes them feel like they are important to you as a person, not just an employee.

For a relatively small outlay, employers can get into the Christmas spirit by giving hardworking staff gift cards. For example, you could give every employee the same value gift card to buy their Secret Santa gifts.

Offering multi-retailer gift cards helps those who are worried about the financial challenges they are facing this Christmas and the stigma of not being able to afford to join in with their colleagues – which can lead to people experiencing anxiety or taking sick days to avoid events.

Christmas, as we are reminded every year, is meant to be a time of goodwill. With a little bit of thought and creativity, and a relatively modest outlay, you can help your staff get into the Christmas spirit and foster a greater sense of two-way loyalty in your business.

If you want to ease the financial stress of workplace Christmas events, contact our expert team here to discuss Love2shop’s Gift Card, Contactless Gift Card and e-Gift Card options. They can help you find the right gifts for your employees right up until Friday, 22nd December.

Cost of living crisis may fundamentally change the employer-employee relationship

Cost of living crisis may fundamentally change the employer-employee relationship

UK inflation is now in double figures, hitting 10.1% in July, and the Bank of England is warning of 13% by the end of the year.

Millions of people are facing a tough autumn and winter. It seems now the cost of pretty much everything is rising – filling up your car, buying groceries. And the projected cost of powering and heating our homes reaches ever more eye-watering levels.

People are struggling now and are likely to find their incomes squeezed even more over the coming months. However, for some people, extra help is coming from what perhaps they might see as an unexpected source – their employer.

For generations of people their relationship with their employer was quite simple. They would come into work each day for a set number of hours and would be paid accordingly for that time. For some there might be bonuses.

The corporate mantra ‘our people are our greatest asset’ may have been trotted out every now and again but such declarations were often met with an eye-roll from overworked workers. As far as they were concerned the relationship was purely transactional.

When employers showed people they were their greatest asset

In the years leading up to the COVID-19 pandemic there were signs of a cultural shift. More enlightened employers started to talk about ‘wellbeing’. No doubt this was partly inspired by multiple studies showing mental health issues were costing UK plc billions each year in lost productivity.

Environmental Social and Governance (ESG) came to the fore. This asked what companies were doing to cut carbon emissions, address diversity and, crucially, focus on the wellbeing of their teams. Investors are now increasingly looking at what ESG framework a business has in place before they part with their money.

This new culture of enlightenment accelerated during the pandemic. Firms, large and small, simply had to demonstrate they had procedures in place to minimise the risks to their staff. If they wanted to keep operating, they had no choice but to put protections in place.

And it could be argued the cost of living crisis is one of the first big tests for ESG. Directors and HR departments are looking at their staff and they are seeing people struggling to make ends meet. A growing number of businesses are realising they can’t just say ‘well, that has nothing to do with me’.

Wage stagnation is prompting employers to respond in new ways

We are seeing a rise in industrial disputes with unions pushing for significant pay rises and some companies, at least initially, resisting. However, there is a number of employers who are stepping up to the plate. Car maker, Rolls Royce, is giving employees an extra £2,000 in cash. Banking giants, Barclays and Lloyds, are doing similar.

But this cultural shift is about much more than cold hard cash handouts, as welcome as they are. The most forward-thinking employers are taking a more holistic approach to fostering a workplace culture that makes people feel valued through the good and bad times. Creating relationships that go beyond the transactional.

Love2shop is now working with employers and their HR teams across multiple sectors. It is helping them to generate a positive culture by making people feel valued, recognised and rewarded.

“Love2shop vouchers are truly valued by our employees for the sheer variety they offer.”

One such business is Evri. A home delivery specialist, Evri has prospered thanks to the boom in e-commerce. It delivers packages to people’s homes, workplaces, as well as to ParcelShops and Lockers, seven days a week. It delivers more than 600m parcels a year on behalf of retailers including Next, ASOS and John Lewis.

Thanks to Evri’s rapid growth it now employs 6,500 people across the UK. It wanted to establish a rewards programme and approached Love2shop for help.

Working together they established the company’s ‘My Rewards’ programme using a combination of both Love2shop Digital Reward Codes and paper Love2shop Gift Vouchers.

Alongside the Love2shop Digital Reward Codes and paper Love2shop Gift Vouchers, there is a suite of products including Love2shop Contactless. Love2shop is also accepted by more than 150 leading UK consumer brands including Wilko, Iceland, Matalan and Argos, and Marks & Spencer (through exchange). People can use them to pay for everyday essentials and for little luxuries.

Evri’s My Rewards platform allowed colleagues to award one another Reward Points for their achievements at work to eventually be exchanged for prizes. It also frequently offered ad-hoc recognition, or ran on-site competitions, across their sites.

Rewards needed to be kept simple to redeem because many Evri employees speak English as a second language. This can present a challenge if a redemption process is complex or involves lots of text instructions.

Love2shop’s digital platform allows businesses to easily scale up

With such a diverse workforce, it was important that a broad variety of rewards was available through the scheme. And, because of its ongoing growth, Evri required a reward which could easily scale to service an ever-expanding workforce.

Evri’s Internal Reward Team, implementing the My Reward platform, also needed fast order turnaround to manage the demand from employees during busy staffing periods.

Reward Codes easily integrate with Evri’s My Rewards system while keeping simplicity a priority. Delivered by email, and redeemed without registration, they were the perfect fit for Evri’s platform and their staff’s needs.

Paper Love2shop Gift Vouchers make for excellent on-the-spot and ad-hoc rewards. They’re ideal for audiences with limited or differing computer skills or access to the Internet.

Sarah Woolley, a Reward Specialist at Evri, said: “Love2shop provides a quick, easy and reliable service and their Love2shop vouchers are truly valued by our employees for the sheer variety they offer. There really is something for everyone.

“The end-to-end process from ordering reward codes or vouchers and awarding these to employees is easy to navigate and quick, which works really well for us as we are such a fast-moving business. I would definitely recommend Love2shop to anyone looking for a flexible and comprehensive reward solution.”

Shift in workplace culture could ease burden of cost of living for employees

Many people across the UK will struggle to pay their bills in the coming months. It is a tough time for sure but what hopefully will emerge from this challenging time is a genuine shift in workplace culture.

Smart businesses are now recognising that the traditional relationship between employer and employee is changing. People want to be paid well but they also want to feel like they are part of an organisation that values them as people as well as the skills they bring to the job.

Companies that fully embrace this new way of doing business will create happier and more highly-motivated workforces as well as profitable and successful businesses.

You can read the Evri case study here.

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Cost of living rise presents big challenges – and there are ways to mitigate the impact

Evidence of the UK’s worsening cost of living crisis is becoming impossible to ignore – it is there in the data and in countless anecdotal examples.

One high street butcher, Raymond Millar, reports that his customers had already started saving for their Christmas dinner in July. His savings scheme that allows people to buy their meat for the festive season doesn’t usually start until September.

Then there is the GP, Dr Laurence Dorman, who for more than a year has been offering food vouchers to his patients. He is now giving them out with increasing frequency. Dr Dormam told the BBC the cost of living crisis could have “massive, profound implications” for patients’ health.

It feels like the price of everything is on the rise. As we emerged from the pandemic supply chains struggled to keep up with demand. This caused an initial spike in inflation and now the Russian invasion of Ukraine has accelerated the crisis.

Energy costs push inflation upwards

Russia is a major global source of oil and gas and the war has put huge constraints on supply. From June 2021 to June 2022 gas prices for UK households soared by 95% and electricity prices by 54%. The UK’s wholesale electric price is linked to the price of gas.

From October 1, the energy price cap will go up further. The price cap is a mechanism that sets the maximum amount that suppliers can charge in England, Scotland and Wales. From October the typical annual gas and electricity bill is likely to reach £3,358, according to consultancy Cornwall Insight.

In contrast, in October 2021 the average annual bill was just £1,400. And Cornwall Insight is forecasting this could go above £4,200 by January 2023. Millions of people are wondering whether they will be able to afford to switch the heating on at all this winter. This may dampen the enthusiasm from some for working from home.

Finance and consumer rights guru Martin Lewis, says: “This is a national crisis on the scale that we saw in the pandemic.”

Martin, and many others, are now calling on the government to take urgent action to soften the blow. From September it is likely that, whoever is prime minister, whether that’s Liz Truss or Rishi Sunak, will be forced to act. Both have been vague on the issue during their campaigns. But once they take office, the pressure to act will be irresistible.

Inflation is now above 10% and the Bank of England is projecting it will hit 13% in the next few months, tipping the UK into recession. Food prices are rising rapidly in the shops. Who can forget the price of a tub of Lurpak surging above £9 in July?

Ukraine impact felt in the supermarkets

Again, the conflict in Ukraine is having a major impact. Ukraine is a leading exporter of essential commodities such as sunflower oil, grain, maize and wheat. The United Nations has warned global food costs could rise by 20%. The rising price of oil means the cost of moving food around is also much higher, adding to high prices.

Rising costs are also hitting businesses which are in turn facing the dilemma of whether or not to pass the costs onto their customers. Some cafes, bars and restaurants are considering reducing their opening hours to reduce outgoings, according to a study by eEnergy and Censuswide.

And even nipping out for a sandwich in your lunch break is now becoming more expensive. In the last few weeks both Boots and Co-op have hiked the prices of their meal deals. Outside London, Boots has put the price up from £3.39 to £3.59. In London it has gone up from £3.99 to £4.19.

Co-op’s meal deals have jumped in price from £3.50 to £3.75. And the nation’s favourite bakery chain, Greggs, is warning of rises of up to 9% on some products in the coming months.

There is upward pressure on the cost of getting to and from work. Motorists have already seen petrol prices at the pumps rocket. And public transport users face further unpredictability. Train tickets prices rise each January based on the retail price index from the previous July, plus 1%. This means commuters could face 12% fare rises in 2023.

Although still low by historical standards, interest rates are also on the rise. At the time of writing the Bank of England has pushed up rates to 1.75% from 1.25%. Those on fixed-rate mortgages have some protection for the moment. However, the average monthly cost of a tracker mortgage has increased by more than £160 since December 2021.

Simple actions that make a difference 

There are steps people can take to mitigate some of their daily outgoings. Sharing car journeys into work with colleagues could make a significant difference to fuel costs. As could using park and ride schemes. And although grocery prices are rising, taking your own lunch into work will always be cheaper than buying a sandwich.

And many coffee shops run loyalty schemes where you get a free hot drink after your card’s been stamped so many times, or a reduced price if you use a reusable cup. These smaller benefits can make a difference over time.

There are also things employers can do. There is an increasing number of businesses which are being pro-active. According to the Living Wage Foundation, 10,000 employers in the UK have now committed to paying the Real Living Wage. At £9.90 for most of the country and £11.05 in London, this is higher than the mandated National Minimum Wage.

In recent weeks there have been multiple reports of companies pledging one-off financial payments to help their people deal with the cost of living. One of those is Love2shop, which has offered a payment to all of its employees.

And the company is doing its bit for the wider community by partnering with digital payment business PayPoint. This agreement will see both parties expand their product range to provide local authorities with a new way of servicing the most financially at-risk people.

Employers can do their bit to help

Love2shop is also working with businesses across the country to help them offer real financial rewards and incentives through its Love2shop gifting products. Given the broad range of retailers available on Love2shop, it allows employers to meaningfully contribute to their employees’ cost of living dilemmas if that’s how they choose to spend their gift cards.

As well as the ‘treat’ opportunities with a Love2shop Gift Card, it’s also accepted by more than 150 leading UK consumer brands including Sainsbury’s, Argos, Tesco, Wilko, Iceland, Matalan, New Look, and Argos. So people can choose to buy everyday essentials or for those little luxuries.

With the new school year about to start, a multi-retailer gift card could offer great savings on the price of school uniforms or other essential items such as school shoes or a PE kit.

This is also the time of year when we start thinking about Christmas. People could use their gift card to get a head-start and buy gifts in advance, taking away some of the stress normally felt in November and December.

Some employers may be able to negotiate cheaper corporate discounts with local car parks to reduce parking costs, or allow more people to work from home when practical – if the costs don’t outweigh the costs of going to work considering the rising fuel costs come winter.

There are tough times ahead but employers can make a big difference to the lives of their employees for a modest outlay.

If you can see how Love2shop reward and recognition products could help your business, contact our business team today. Email [email protected] or call  0344 375 0739.

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Turning The ‘Great Resignation’ Into The ‘Great Retention’

The ‘Great Resignation UK’ isn’t a new term that’s emerged in the last few weeks, it’s the worrying, new term that deftly describes the global response of workers to the Covid pandemic, company culture, wage stagnation and ongoing cost of living crisis. It is the précis for: a mass resignation, change of jobs, search for a new way of life, desire for hybrid working, better pay and improved job satisfaction. Welcome to the challenges of 2022…

In the US, it’s called ‘The Big Quit’, with Microsoft Work Trend Index (2021) saying, “With over 40 per cent of the global workforce considering leaving their employer this year, a thoughtful approach to hybrid working will be critical for attracting and retaining diverse talent.” In Germany last summer, over one-third of the country’s companies reported a staff shortage, while the UK reported more than 1 million vacancies were available. So what does this summer look like for the UK’s staff retention?

HR Professionals Are Feeling The Burn

Most professionals working in HR, recruitment, talent acquisition or in sectors affected by the ‘Great Resignation’ will feel the new pressure to understand how to improve their company’s chances to retain and recruit staff.

Love2shop has one of the UK’s best-selling reward and recognition platforms. In the last year, Love2shop has increasingly been approached by a raft of sectors to discuss how their gifting rewards can be used to galvanise remuneration packages to attract new talent (and retain it), or more recently, help recognise the cost of living challenges being faced.

Love2shop Retailers - Iceland John Lewis Argos Heron Foods

Through the enormous choice of retailers and brands on the Love2shop gift products – stretching from luxury ones like John Lewis for a ‘treat’ or essential shopping brands such as Iceland, Argos or Heron Foods – Love2shop can provide ‘something for everyone’. This allows companies to buy in volume but not limit anyone from finding something to suit their needs.

It also reflects well on a company when it allows its employees to choose. When companies reward with an actual product, (think bottles of bubbly or bunch of flowers), it means an essential food shop is out of the question – and that might serve employees better right now. Equally, you never need to know so they can do it with dignity – and gratitude.

Four Million US Workers Have Quit Jobs Since 2021

The gravity of the job situation can’t be over-emphasised; many companies, large and small, face very real challenges to business growth as a direct result of being under-resourced and unable to attract into their industry the right sort of people. In the US, for instance, over four million workers quit their jobs since the post pandemic reset began in 2021. And in some global sectors, the average pay has been forced to sharply rise making smaller companies less able to compete in the recruitment face-off.

Boost Packages And Attract Staff With Reward and Recognition

How do you compete in the smaller pools of talent? Or engage and support your employees? Are there internal conversations exploring how to help them during this cost of living challenge? Now is a good time to make some decisions about quick but meaningful fixes that will retain and engage loyal employees or galvanise monthly income as its value dwindles in the face of our economic situation. And if you do want ‘something for everyone’, please contact our business team – everyone’s a good egg and happy to walk you through ideas.

Read our previous blogs…

What is customer acquisition
50 Employee Perks
What is customer acquisition