• Replies 17 replies
  • Subscribers 10 subscribers
  • Views 16996 views
  • Users 0 members are here
Options
Related

'Banked hours' vs overtime

Sarah

Hi all

This is only my second time posting on the forum as I am not usually very brave. So apologies in advance if my post is too wordy.

I work in manufacturing and my company goes through peaks and troughs at certain times of the year.

Naturally, during peak periods, our factory operatives have the opportunity to work overtime and are paid at x1.5 for the first 4 hours of overtime and x2 thereafter.  

During quiet periods, we sometimes have to implement short time working or even lay off. Thankfully, the latter is very rare.

With the current cost of living situation, my senior management team are looking at ways to alleviate the financial impact of short time working on employees as well as ensure that we don’t lose good employees.

So, my MD came up with the idea of banked hours where employees would bank hours worked above their contractual hours to be used during quiet periods. For example, an employee on a 39-hour week works 48 hours in a week. Rather than pay the excess 9 hours at the relevant premiums in the pay reference period, the hours are banked. When the business is experiencing a downturn in sales and the employee is working short days (with the hours not worked unpaid), the banked hours are used to pay them for full 39 hours.

I must admit, when this was first mentioned to me, I immediately thought…TOIL (which would have been easy). However, I am a bit stumped due to the overtime element as our contract does state that overtime will be paid at the premiums and what minimum wage implications could be.

If anyone has implemented this successfully, I would be very much grateful for any ideas you can share. Likewise, any thoughts on the ‘whys’ & ‘why nots’ would be equally appreciated.

If this subject has previously been tackled, a point in the right direction would also be appreciated as I am struggling with my searches.

Many thanks in advance

Parents
  • For all the reasons articulated by Robert and Maya, I think very few of your workers are likely to take the bank hours option if it were offered. There are a range of technical issues with implementing such a scheme (e.g. what do you do if someone banks time and then leaves before they use it? What if you don't have a summer slow-down and they never need it? At what rate would it then be paid out?) to very little benefit and no legal obligation.

    If I were your MD, I would be focusing more on finding creative ways to use the time not building beds to make something else that can be revenue generating in the down time. Perhaps acquire some storage so that beds can be made in the summer to provide a surplus of stock for sale in the winter/spring so that less overtime needs to be paid to meet demand.

    But I'm just in HR, so what would I know?
Reply
  • For all the reasons articulated by Robert and Maya, I think very few of your workers are likely to take the bank hours option if it were offered. There are a range of technical issues with implementing such a scheme (e.g. what do you do if someone banks time and then leaves before they use it? What if you don't have a summer slow-down and they never need it? At what rate would it then be paid out?) to very little benefit and no legal obligation.

    If I were your MD, I would be focusing more on finding creative ways to use the time not building beds to make something else that can be revenue generating in the down time. Perhaps acquire some storage so that beds can be made in the summer to provide a surplus of stock for sale in the winter/spring so that less overtime needs to be paid to meet demand.

    But I'm just in HR, so what would I know?
Children