Are you an employer or work overtime?

[edstrom76]

Then this might affect you: http://www.bbc.co.uk/news/business-29896810

Essentially it's a new ruling stating that overtime should form part of your holiday pay.

It looks like backdated claims are also a possibility - this could have a huge impact on businesses.

It is unclear what the definition of overtime is, as part of this ruling. Would things like callout/standby allowances be included?

 

[trapperjohn]

Now if the overtime I have worked in the past be could be backdated and put into my final salary pension that would do nicely thank you.

Oh look, pigs, squadrons of them, right outside my window.

This I reckon will break a lot of firms.

 

[abecketts]

The backdated bit will only be 3 months, I can see firms changing practices to minimise the effect of this ruling but I think the cbi will support taking this to the court of appeal so this one will run for a wee while longer.

 

[Spin_bowler]

It's also only for compulsory overtime, at the moment. Voluntary OT isn't included.

 

[trapperjohn]

It's also only for compulsory overtime, at the moment. Voluntary OT isn't included.

Rats - I was the biggest "Overtime Bandit" going.

 

[Deleted member 37751]

It's also only for compulsory overtime, at the moment. Voluntary OT isn't included.

Exactly this ^^

This ruling is simply closing a loophole that certain employers use to try and pay their employees the absolute minimum.

 

[markjay]

The other interesting point is that the overtime will count towards pay, but not towards holiday allowance.

So someone who gets paid £100 per day and regularly works 10 hours a day will in fact be working 1.25 day each day and receive £125 per day for both working days and holiday days.

But - that person will have gaines just one working day towards his/her holiday allowance, not 1.25 day, even when he/she work 10, 12, or 14 hours in a single day.

 

[markjay]

Exactly this ^^

This ruling is simply closing a loophole that certain employers use to try and pay their employees the absolute minimum.

I think this comment is unfair - many employers simply followed the government's official guidelines. It was neither a 'loophole' nor an attempt to pay the 'absolute minimum'.

 

[Deleted member 37751]

I think this comment is unfair - many employers simply followed the government's official guidelines.

Ah yes, that old chestnut; "we were simply following the governments guidelines".

Do you think it was right and fair that certain employers were forcing their employees to have low hourly contracts to then bump it with forced overtime thus sidestepping the need to pay the correct holiday entitlements and so on?

This ain't your average IT firm with an average wage bill of £80k per employee in London, these loopholes were mostly used against the lower paid to keep people's overall remuneration packages to an absolute minimum.

 

[markjay]

...Do you think it was right and fair that certain employers were forcing their employees to have low hourly contracts to then bump it with forced overtime thus sidestepping the need to pay the correct holiday entitlements and so on..?

No, I don't think it's right and fair to do that.

And I also don't think many employers actually did.

Many people just set up a business, then go to the Business Link website and simply follow the guidelines.

Why brand them unfair or immoral?

 

[Deleted member 37751]

Many people just set up a business, then go to the Business Link website and simply follow the guidelines.

Hahahaha! That's certainly put a smile on my face this morning!

In a backhanded way, you're almost proving my point exactly; that these employers that you say are 'simply' following the guidelines are finding ways to pay the absolute minimum.

Can I ask, are you an employer? I am, I own three businesses and try my best to pay those that work for me the best I can because someone that isn't being paid right will show little loyalty and be barely motivated.

 

[Giantvanman]

My son is one of those that should benefit. Low pay, compulsory overtime, long hours. And anyone who thinks his position is rare is very much mistaken. In fact, it is the norm in the manual / service/ low paid sector apparently.

 

[Harrythedog]

Now if the overtime I have worked in the past be could be backdated and put into my final salary pension that would do nicely thank you.

Oh look, pigs, squadrons of them, right outside my window.

This I reckon will break a lot of firms.

If you've paid any pension contributions on the overtime it must be included in your final salary figure.

This new ruling has been timed right as a lot if unscrupulous employers would have used this when the compulsory pension scheme affects everyone in a few years

 

[Dryce]

Can I ask, are you an employer? I am, I own three businesses and try my best to pay those that work for me the best I can because someone that isn't being paid right will show little loyalty and be barely motivated.

Not every body has the luxury of being Mr Nice Guy. They go by what their sector (and likely their competition) does in terms of dealing with labour costs.

That aside:

At the end of the day an amount of money is paid by the employer to the employee using some type of structure - eg. basic + commision, fixed monthly, fixed weekly, fixed weekly + overtime, zero hours, whatever.

Holiday pay gets built into this structure - it's not really 'holiday pay' - it's just part of the overall remuneration package that smooths the payments over a year. You're not actually paid while you're on holiday - it just looks that way.

Now the reality is if you are running a business with a lot of low paid staff then if your staff costs go up then you likely as not either (a) try and increase your prices or (b) find a way to reduce your new high staff costs by other means ....

I suspect that while some may gain from this - at its heart over the longer term it is a zero sum game as far as the ruling is concerned.

 

[Deleted member 37751]

Not every body has the luxury of being Mr Nice Guy. They go by what their sector (and likely their competition) does in terms of dealing with labour costs.

It's not about being "Mr Nice Guy", it's about seeing the bigger picture; pay people that bit more than the going rate and they will be more productive and most importantly they'll show loyalty when the time comes and in my experience it has more than paid itself back.

I have no time whatsoever for businesses that are in a race to the bottom and use every 'guideline' to justify their practices. Most of the people this affects are on or near the minimum wage and it'll work out peanuts for these employers to cough up but make a massive difference to their employees.

I seem to recall Doomsday talk when the minimum wage was introduced and yet I didn't hear of too many businesses shutting shop because of it...

 

[davidjpowell]

It's not about being "Mr Nice Guy", it's about seeing the bigger picture; pay people that bit more than the going rate and they will be more productive and most importantly they'll show loyalty when the time comes and in my experience it has more than paid itself back.

I have no time whatsoever for businesses that are in a race to the bottom and use every 'guideline' to justify their practices. Most of the people this affects are on or near the minimum wage and it'll work out peanuts for these employers to cough up but make a massive difference to their employees.

I seem to recall Doomsday talk when the minimum wage was introduced and yet I didn't hear of too many businesses shutting shop because of it...

That's because half of them are not apprentice's.... for example Apprentice Waiter.....

I'm not convinced this will make a huge amount of difference to anyone. It'll be a few quid extra for a few weeks of the year. I imagine it's taken a hew years to get to court as it's simply not enough to bother folks without trade union backing.

 

[markjay]

Hahahaha! That's certainly put a smile on my face this morning!..

And why is that?

...Can I ask, are you an employer? I am, I own three businesses and try my best to pay those that work for me the best I can because someone that isn't being paid right will show little loyalty and be barely motivated.

I am, and I don't have this particular issue as our pay structure is different, but I am alarmed by your comments that seem to taint everyone with the same brush.

As Dryce said, it is down to the sector you operate in, and obviuosly IT workers in London are not your typical low-paid unskilled employee, but I protest on behalf of all those employers who are being being branded as immoral by your post.

 

[Deleted member 37751]

but I protest on behalf of all those employers who are being being branded as immoral by your post.

How can you protest about something of which you obviously don't know?

How can you protest on behalf of the thousands and thousands of different other employers when you don't know them?

And I'm not labelling all employers as being bad, the thought is proposterous, it is you that is making that assumption.

 

[wongl]

I don't get paid overtime anymore as I now work on a day rate. But when I used to be paid overtime, I was paid time and a half during weekdays, two times on Sat and two and a half times on Sun/Public holidays.

It was explained to all employees that the overhead of the business (rent, desk space, business rates, pension, sick and holiday pay, etc) has been factored into our basic pay, thus allowing a high OT rate. So it seems unfair to me that the employer now needs to factor in additional holiday pay when the OT rate has already been increased to account for it.

I am also further confused why commissions would attract further holiday pay? If I worked my 37.5 hour week and make no sales I would make no commission. If on the other hand I make £5000 sales during my 37.5 hour week and get a commission of £100, why should I get additional holiday pay for working the same amount of time?

Has the world gone mad?

 

[Dryce]

I seem to recall Doomsday talk when the minimum wage was introduced and yet I didn't hear of too many businesses shutting shop because of it...

That's because the minimum wage isn't that high.

And because the dodgier end of the economy just ignores the law and pays cash in hand.

There have also been a lot of other things going on over the last decade and a half (eg. the recession, commodity prices, the internet, cheap imports from China, outsourcing to foreign countries, addition to the workforce by immigration) that would make it difficult to determine the impact of the minimum wage in isolation.

There is also the law of unintended consequences. The declaration of a minimum wage may well have set a standard for some employers whou would pay more to pay less. That sounds mad - but setting the minimum wage implicitly declares an *acceptable* low price on someones's labour.