By Melanie Dawson, Marketing Co-ordinator Sage UK Ltd

Overtime itself is not covered by specific legislation, and so companies can use their own discretion when setting their own policies in relation to it. Generally it is good practice to ensure that policy on overtime is as clearly defined as possible, and that it is applied consistently to all of the employees in an organisation.

Points to consider when drawing up an overtime policy are:

1. What is considered as overtime?

Generally, this would be hours worked over and above employees’ contractual hours, however, a company may specify that any additional overtime payment is payable for hours worked over and above the full-time equivalent contractual hours.

2. What are the pay arrangements?

Should overtime be paid as normal time or at an enhanced rate? Or should overtime be taken as time in lieu?

3. What are the practical arrangements?

Who will authorise and agree any overtime, and how will it be recorded and processed?

Information taken from Sage Update Spring 2011

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