Overtime refers to hours worked in excess of an employee’s normal contractual hours. For most council employees, this is typically over 37 hours per week (unless a different working pattern is specified in the contract).

It's important to distinguish between:

Contractual overtime – pre-agreed extra hours that are part of the job.

Voluntary overtime – offered and worked occasionally, without obligation.

Compulsory overtime – required under the contract when needed.

How Should Overtime Be Managed and Paid?

In accordance with UK employment law and guidance, the following good practice should be followed:

All overtime should be agreed in advance by the Clerk or Council to manage budgets and ensure transparency.

There is no automatic legal entitlement to extra pay for overtime, unless it takes pay below the National Minimum Wage. However, many councils choose to pay:

Plain time (same hourly rate)

Time and a half (1.5x hourly rate)

Or offer TOIL instead (more on that below)

Overtime pay rates should be clearly outlined in the contract of employment or staff policies.

Accurate timesheets or clocking systems should be used to record all extra hours worked and authorised.

One area often missed is that overtime attracts holiday pay.

Regular overtime should be included when calculating holiday pay – not just basic salary. This ensures employees aren't financially disadvantaged when taking leave.

If an employee regularly works overtime, their holiday pay should reflect their average earnings, typically calculated over the previous 52 weeks (excluding weeks with no earnings).

Alternatively, holiday pay can be paid on overtime during the period the employee is being paid for the overtime.

Time Off in Lieu (TOIL) is when employees are given time off instead of being paid for extra hours worked.

For example:

If a member of staff works 4 extra hours at an event, they may take 4 hours off at a later date – ideally within a reasonable timeframe.

To manage TOIL fairly:

TOIL arrangements must be agreed in advance.

Keep a clear log of hours accrued and taken.

Set time limits (e.g. TOIL to be taken within 3 months).

TOIL policies should be written down and shared with staff.

Contracts and Policies: Time for an Update?

Many issues with overtime or TOIL arise simply because the contract of employment is silent or unclear on the topic. We strongly recommend:

Reviewing staff contracts and policies to:

Define working hours and what counts as overtime

Confirm rates of pay for extra hours

Outline TOIL arrangements

Explain how holiday pay is calculated

Ensuring consistency across staff members and roles

Seeking advice from your HR provider or payroll provider if you are unsure

Overtime and TOIL are valuable tools for parish councils as they help cover busy periods and support staff flexibility. But they need to be clearly managed and fairly applied to comply with the law and maintain good employment relationships.