A ruling from the Employment Appeal Tribunal that employees should receive extra holiday pay for working overtime has overturned the previous system whereby companies only had to count basic pay. The decision has already been condemned by businesses who say it could cost them billions.
Here is what you need to know:
How much extra will I be paid?
It depends how much overtime you work regularly. The payments will be based on your average total wages, much in the same way as employers calculate the average pay of their workers to ensure they comply with the minimum wage rules.
It doesn’t actually state in my contract that I must do overtime. Does that rule me out?
Technically, yes. Yesterday’s judgment was about groups of workers whose overtime was stipulated in their contracts. Regular “voluntary” overtime is not covered, and may have to be tested in future tribunals. However, unions say it is clear that the spirit of today’s judgment is that employees deserve to be paid for the regular hours worked.
Will it affect my future pay rises?
Possibly. Some employers are likely to use the extra burden as a reason to keep down pay rises.