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Supply Chain Innovation

Payment of Premium Rate for Overtime in the United Kingdom

Publication date: 
Friday, August 23, 2019

Employers in the UK are not legally required to pay an overtime premium unless there is an individual employment contract signed between the employer and each worker that specifically states a premium rate for overtime work. Unless there is statutory legislation, a collective agreement allowing local agreements on overtime premium rates, or an active collective bargaining agreement, an employer can decide whether to pay a premium rate for overtime hours.

Without a requirement, some employers set their own rules and practices which may lead to violations of international labor standards and the FLA Code of Conduct and benchmarks. The FLA’s Workplace Code of Conduct and benchmarks provide clear guidance on protecting the rights of the workers in supply chains where local laws fall short. With regard to overtime premiums, Benchmark C.7.1.2 provides that, “In those countries where there is no legally established overtime premium, employees shall be compensated for overtime hours at the prevailing industry premium rate or at the internationally recognized overtime rate, whichever is higher.” 

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