Survey of overtime premia

OVERTIME

Survey of overtime premia

Three-fifths of employers surveyed by IRS have attempted to reduce paid overtime in the past year. Tighter managerial controls, new technology and changes to working practices are the strategies most commonly adopted.

But IRS reckons that these interventions “appear to have had a limited impact, with levels of both paid and unpaid overtime remaining unchanged in many organisations”.

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The IRS report examines:

• the different premia paid for overtime working
• eligibility for paid overtime
• the proportion of the paybill accounted for by overtime pay
• how organisations are attempting to cut down on paid overtime
• the extent of unpaid overtime.

How overtime premia are calculated

The standard approach used to calculate overtime premia is to apply a multiplier to employees' basic pay. This approach is used by all 73 organisations surveyed by IRS:

• Weekdays: Time-and-a-half is the most common overtime rate for weekdays, paid by more than a third of respondents. One in five pays for overtime at basic rates, while one in six offers time off in lieu.
• Saturdays: Time-and-a-half is also the most common overtime premium for Saturday working, operated by two-fifths of employers. This is more than twice as prevalent as the two next most common rates, double-time and time off in lieu, each used by 15%.
• Sundays: More than half of organisations surveyed by IRS pay staff double-time for working overtime on Sundays. This is followed some way behind by time off in lieu and time-and-a-half, offered by 13% and 11% respectively. Basic rates are paid at just one in ten workplaces.
• Bank holidays: Double-time is the most common overtime premium for bank holiday working, awarded by just under half of organisations surveyed. Just over a quarter offer time off in lieu, the next most popular option, while one in ten pays basic rates only. More than one in eight (13%) employers surveyed by IRS say they vary overtime payments for different bank holidays.

Want to know more?

Title: “Overtime survey 2007: Employers struggle to reduce overtime”, Pay and Benefits Bulletin 666, 6 July 2007, IRS.

Survey sample: The latest IRS overtime survey is based on responses from 73 organisations, together employing 71,160 staff.

Availability: The bulletin is now available as part of a subscription to XpertHR. Go to www.xperthr.co.uk to subscribe.

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