Employer avoiding paying overtime

[MyNameIsUrl]

A friend is currently working overtime, paid at a premium rate. This is on a major project which will end in a few months, and so will the overtime.

The employer is proposing creating a second part-time job for the employee of 10 hours per week, so no overtime would be worked on the first job and no premium rate would be paid. The second job would presumably earn holiday pay (which the overtime does not), but I'd imagine holiday pay is a lower premium than the overtime rate.

Is this a legal get-out for the employer, and if not what can the employee do about it practically?

[melonfool]

A friend is currently working overtime, paid at a premium rate. This is on a major project which will end in a few months, and so will the overtime.

The employer is proposing creating a second part-time job for the employee of 10 hours per week, so no overtime would be worked on the first job and no premium rate would be paid. The second job would presumably earn holiday pay (which the overtime does not), but I'd imagine holiday pay is a lower premium than the overtime rate.

Is this a legal get-out for the employer, and if not what can the employee do about it practically?

What does the first employment contract say?

How many hours is the person originally contracted for?

There is no legal requirement to pay a premium for working extra hours.

Mel

[Slarti]

A friend is currently working overtime, paid at a premium rate. This is on a major project which will end in a few months, and so will the overtime.

The employer is proposing creating a second part-time job for the employee of 10 hours per week, so no overtime would be worked on the first job and no premium rate would be paid. The second job would presumably earn holiday pay (which the overtime does not), but I'd imagine holiday pay is a lower premium than the overtime rate.

Is this a legal get-out for the employer, and if not what can the employee do about it practically?

I'd find it odd for one person to be in 2 employments with the same employer, and would wonder if HMRC might not look upon it as a way for the employer to avoiding Er's NI.

For the employee, I certainly wouldn't split one job into 2 just so I could be paid less. Unless, possibly, the 2nd part time job would continue past the end of the project. But as employment in that post would have been less than 2 years, I see no security there.

Practically? Stop doing the overtime and refuse to take the 2nd job. Or find a new employer, ASAP.

Slarti

[melonfool]

A friend is currently working overtime, paid at a premium rate. This is on a major project which will end in a few months, and so will the overtime.

The employer is proposing creating a second part-time job for the employee of 10 hours per week, so no overtime would be worked on the first job and no premium rate would be paid. The second job would presumably earn holiday pay (which the overtime does not), but I'd imagine holiday pay is a lower premium than the overtime rate.

Is this a legal get-out for the employer, and if not what can the employee do about it practically?

I'd find it odd for one person to be in 2 employments with the same employer, and would wonder if HMRC might not look upon it as a way for the employer to avoiding Er's NI.

For the employee, I certainly wouldn't split one job into 2 just so I could be paid less. Unless, possibly, the 2nd part time job would continue past the end of the project. But as employment in that post would have been less than 2 years, I see no security there.

Practically? Stop doing the overtime and refuse to take the 2nd job. Or find a new employer, ASAP.

Slarti

I can't see how they would avoid employer's NI? You can have as many contracts as you want with the same employer, though why you would I have no idea.

And overtime does attract holiday, btw: http://www.telegraph.co.uk/business/sme ... ay-advice/

Mel

[Slarti]

I can't see how they would avoid employer's NI? You can have as many contracts as you want with the same employer, though why you would I have no idea.

And overtime does attract holiday, btw: http://www.telegraph.co.uk/business/sme ... ay-advice/

Mel

I had it in my mind that Er's NI was banded, but it seems not.

I still wouldn't take it, if it were me.


Slarti

[MyNameIsUrl]

What does the first employment contract say?

How many hours is the person originally contracted for?

There is no legal requirement to pay a premium for working extra hours.

Mel

It's a part time job, 30 hours, but if overtime passes the full-time level of 38 hours then a premium is paid (30% I think on those hours). So a 38-hour week would all be paid at standard rates. It's a civil service job with lots of rules, but my friend is concerned that his boss is trying to get round the rules, creating a second job also at standard rates.

[Slarti]

It's a part time job, 30 hours, but if overtime passes the full-time level of 38 hours then a premium is paid (30% I think on those hours). So a 38-hour week would all be paid at standard rates. It's a civil service job with lots of rules, but my friend is concerned that his boss is trying to get round the rules, creating a second job also at standard rates.

Tell him to talk to http://www.pcs.org.uk/

Even if he is not a member, they will be interested.

Slarti

[melonfool]

I can't see how they would avoid employer's NI? You can have as many contracts as you want with the same employer, though why you would I have no idea.

And overtime does attract holiday, btw: http://www.telegraph.co.uk/business/sme ... ay-advice/

Mel

I had it in my mind that Er's NI was banded, but it seems not.

I still wouldn't take it, if it were me.


Slarti

Ah, I think it used to be, which was why employers used to employ more part timers, but HMRC/etc got wise to that one.

Mel

[melonfool]

What does the first employment contract say?

How many hours is the person originally contracted for?

There is no legal requirement to pay a premium for working extra hours.

Mel

It's a part time job, 30 hours, but if overtime passes the full-time level of 38 hours then a premium is paid (30% I think on those hours). So a 38-hour week would all be paid at standard rates. It's a civil service job with lots of rules, but my friend is concerned that his boss is trying to get round the rules, creating a second job also at standard rates.

It sounds as if his boss is trying to get round some internal rules, but not breaking any laws.

Having said that, you said the new contract was 10 hours a week, friend is contracted to 30 and O/T is paid on any over 38 - are you trying to say this boss is seriously trying to save 30% pay on two hours a week, for just a few months? Seems pretty unlikely. Or, I suppose you mean that on the new contract he won;t be paid O/T rate until he reaches 38 hours also? But, how many hours can he actually work in a week anyway? 48 hours on a rolling average is the legal maximum without an opt out.

Anyway, he just refuses to sign a new contract, easy. If the work needs doing they'll ask him to do it. If he goes over the 38 hours on his current terms then they pay him the enhanced rate.

It's only a few months, he should just tell them he's not interested.

I don't think any laws are broken here (except maybe the Working Time Regs on the 48 hour week).

Mel

[foundone]

Most employers would just say that there is no budget for the overtime, we're not a 9-5:00 shop, professional grade, blah, blah. The fact that he didn't suggests that someone somewhere would be interested, Senior Management, Unions etc.