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Do employers have to pay shift allowance?

Do employers have to pay shift allowance?
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There are currently around 3 million shift workers in the UK alone, and this number is said to have seen a 5% increase since 2013. Shift workers play an integral role in the economy, and they often have to sacrifice normal sleeping patterns and a traditional lifestyle in order to keep up with their shift work. While there are certain people who suit the odd hours that shift work offers and directly seek it out, many see shift work as a sort of last resort, and shift positions are notoriously difficult to fill, and these positions are known for seeing high turnover rates.

Shift workers are important as they allow companies to run a 24-hour workforce and double productivity levels. But, unfortunately, shift workers are often taken advantage of by employers.

As an employer, you have a duty and responsibility to do right by your employees and operate within the relevant and current legislation. Therefore, it is important that you stay up to date with what is required from you in terms of shift pay allowance as an employer. As we’ll see in this article, the laws governing shift work are unclear, so it leaves a lot up to the employer.

In this article, we look at what shift pay allowance is and when employers should feel obligated to pay it.

What is shift work?

Shift workers are often thought of as those who work evening, night, and early morning shifts, and that shift work includes any work that falls outside the ‘normal’ working hours of 7 am and 6 pm. While this is true, daytime shift workers are also very common, and shift work includes a vast array of jobs such as bartenders, waitrons, packers, drivers, seamstresses and so on.

Shift workers are most often part-time workers and are usually subject to having their shifts changed from week to week or month to month. While some shift work, such as nursing, requires degrees and/or training, the vast majority of shift work is considered to be ‘entry level’ work.

There are no legal definitions of shift work in the UK, but shift work can be seen as:

  • A working pattern in which an employee continues to replace another in a 24-hour cycle
  • Shifts which are in the evening, night-time or early morning
  • Extended working periods
  • Split shifts
  • Stand-by/ call duties

What is the difference between a shift worker and a part-time employee

There is a big misconception that shift workers and part-time employees are completely different entities, where in fact, both a part-time employee and a full-time employee could be a shift worker based on their contract. This is because shift work has to do with the irregular times being worked and not the nature of the employee contract.

What are shift allowances?

Shift allowance is known as the additional pay that employees pay their shift workers because of the detrimental effects and stress that is associated with working shifts and unsociable hours.

Do employees need to pay their employees a shift allowance?

Shift workers and part-time workers in the UK are only legally entitled to minimum wage, and because a vast majority of shift work is made up of entry-level positions, many shift workers only receive the bare minimum despite their challenging work schedule.

While there is no legal obligation to pay shift workers a shift allowance, there is somewhat of a moral obligation, and many employers across the UK recognise this and pay their employees a shift allowance on top of their wages.

At the end of the day, it is completely up to the employer as to whether they want to pay their employees a shift allowance or not. Some employers pay their shift workers as much as 20% of their wage in shift allowance, but the exact amount differs vastly from company to company.

Are there any instances in which employees have to pay their shift workers additional pay?

There are certain instances in which employees may have to grant their shift workers additional pay. In a case in which an employee has a contract of employment with your company and has to work unsocial hours, they will have a right to additional pay whenever they happen to work these unsocial shifts that you may have allocated to them. It must be understood that this is their contractual right. The same goes for part-time workers as they cannot be treated less favourably.

The factors to consider when deciding how much shift allowance to pay your shift workers

If you are struggling to decide whether or not to pay your shift workers a shift allowance, consider the following factors:

Unsociable hours

Unsociable hours are usually considered as the hours that fall outside the typical working hours of 9 am-5 pm. This would include evening shifts, night shifts and early morning (graveyard shifts). If you have employees that work these types of shifts, it is usually expected that you pay them a shift allowance, and it is very uncommon for workers working unsociable hours not to receive a shift allowance.

Considering that the majority of people work  9-5, working unsociable hours can really take a knock on employees’ personal lives and sleeping schedules. That is why many employers feel that they should be fairly compensated.

Wellbeing

Working irregular shifts is widely known to cause health implications for workers. Depending on the type of work involved and the shift pattern, shift work could possibly lead to sleep issues like insomnia, poor diet, depression and isolation. Sleeping when your friends and family members are enjoying weekends and working while other people are sleeping can definitely take its toll on both your physical and mental health. Just because shift workers are working a ‘minimum wage’ job does not mean that they should be paid a minimum wage. And offering them a shift pay allowance could really help alleviate some of the stresses that they are facing by working odd hours.

Pay and holidays

Another thing you may want to consider is the wage that you are paying your employees. If you are paying a decent wage that is above the minimum wage and are offering them other benefits, it may be okay to forgo shift pay. However, most minimum wage, shift work jobs will also include shift allowance. While there is no strict legislation surrounding bank holiday pay, you are expected to pay your employees their pay and a half on these days.

The benefits of paying your shift workers shift allowances

While paying shift allowances may just seem like an unnecessary additional expense, especially if you are not obligated to do so, there are benefits that come along with paying your shift workers shift allowances.

Loyalty

By paying your shift workers a shift allowance, you create loyalty with them, and they are less likely to quit. Having a constant turnover of employees is costly in itself as you have to go through a lot of admin and training with each one.

Better work produced

You show appreciation and that you value your employees by offering them a shift allowance on top of their pay. Employees that feel appreciated and valued are more likely to produce better work, have a better work effort and have more respect for their job and for their employer.

How much notice needs to be given if shifts are to be changed

While there are no clear guidelines as to the notice period that both employers and employees need to give when it comes to changes in shifts, the law does deem that a ‘reasonable’ amount of notice ought to be given? But what does ‘reasonable’ look like?

A shorter notice period is usually required for changing a single shift than an entire shift pattern, and it would be considered reasonable for an employer to give at least 12 hours notice when it comes to changing a singular shift. In the case of an entire shift pattern, the employer should give a period of around 24 hours notice.

Contract changes should ideally have a one to two weeks notice period.

If employees need to ask for changes to their shifts, they can do so at any time, but it will be up to the employer whether these changes will be granted or not. It would most likely be in the employee’s best interests to get their requests in as soon as they know that they want a change to be made.

As the notice period is left up to the employer, it would be a good idea to include the expectations for notice periods in your staff handbook.

Further tips for treating shift workers fairly

Have a good HR rep

Having a good HR rep to manage your employees and their relevant issues is always a very good investment to make. They are up to date with all the latest legislation and know-how to deal with any issues tactfully and fairly.

Encourage short breaks

Because of the odd hours of shift work, small breaks should be encouraged to keep employees minds focused and reduce the risk of burnout. Research shows that small breaks throughout the workday, especially breaks that include walking or stretching, actually increase productivity.

Plan shifts in advance

Many establishments that hire shift workers often allow employees to request their shifts for the week or month, and then the manager can do their best to accommodate everyone’s requests. This way, you know your staff are likely to be satisfied with the shifts that they receive. By putting shift lists out in advance gives employees time to plan their lives around their shifts and ensure that they are ready for them ahead of time.

Other legal obligations surrounding shift work

What we have learned in this article so far is that there is no specific legal obligation when it comes to paying shift allowance. But are there any other legal obligations that employers should be aware of?

Rest breaks

One of the most important things to note is that the shift patterns should be set up in such a way that each employee gets sufficient rest breaks, and this is in accordance with the Working Time Regulations 1998.

Sleep shift

A sleep shift during working hours is still counted as ‘work’ if the employee is on call and in the workplace. There should be at least seven hours difference between each shift, and there should be an emphasis that employees are getting enough rest. Employees should not work more than 8 hours within a 24-hour time period, which can be averaged over 17 weeks. However, if there are any hazards involved in night work, a maximum of 8 hours work is the limit in any 24-hour window.

Underage employees

Employees that are under the underage of 18 should not be made to work any nighttime hours (usually between the times of 11 pm and 6 am), but some exceptions can be made within the hospitality industry.

Free health assessment

Employers are also obligated to provide their nighttime shift workers with a free health assessment.

The lack of legislation surrounding shift work

As you can see from the information above, there is very little legislation that actually governs how shifts work in the workplace, and that is why it is the moral obligation of employers to assess whether their employees are being treated fairly.

Your employees’ contracts should make it abundantly clear how their shifts will work and when shift allowance will be paid. By ensuring that everyone within the workplace is treated equally and is on the same page, you can effectively avoid any confusion and misunderstandings.

Are you still uncertain as to which scenarios pertaining to your company involve paying shift allowance or unsure whether you should be paying shift allowance or not, and at what rate? If so, the best thing you could do would be to speak to an HR professional to assist you in coming up with a shift allowance scheme that works for you.

Looking for more professional business articles to help grow your knowledge and business? Learn more from our advice articles today!

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