The pros and cons of unpaid overtime

The rules around overtime (be it paid or unpaid) depend on a worker’s employment contract. In some industries, like legal, it’s even common practice to work beyond the typical hours of 9-5 without compensation.

But where there are no contractual obligations to do so, what are the pros and cons of doing unpaid overtime? Is it a legitimate practice and should salaried staff be expected to do it? In this article, one of the UK’s top-rated company formation agents, Rapid Formations, unpacks these questions.

The pros of doing unpaid overtime

For employees

Some employees are happy to do unpaid overtime despite its negative connotations. These workers often feel that they are already being paid a fair salary for their jobs and are therefore encouraged to dedicate more time to their roles and the company.

Unpaid overtime also allows staff members to reduce their workload, work more flexibly, and catch up on incomplete tasks from the day. Perhaps not being paid for it isn’t ideal, but it’s an option that many people take to make their core hours more manageable.

For example, Gen Z workers (born between 1997 and 2012) reportedly do around 27 hours of unpaid overtime a month to keep up with their to-do list. Interestingly, 80% of them prefer to work additional hours than take a pay cut and have their workload reduced.

Furthermore, unpaid overtime can benefit employees aiming for recognition or a promotion. When they achieve those goals, that is their reward for going above and beyond. For these employees, unpaid overtime is an opportunity to prove themselves and strive for more, making it worthwhile if their employers actively reward productivity and dedication.

Overall, there are some important pros for employees doing unpaid overtime. However, it is entirely up to them to decide whether it is worthwhile, given that it is unpaid work.

For employers

There are advantages for employers when their teams work overtime. Firstly, having extra staff can help the company during busy periods and bottlenecks.

This can be particularly useful if your business is seasonal (where you get particularly busy at Christmas, for example) or if there are staff absences. Employees who work beyond operational hours can be considerably helpful in making these periods more manageable.

Secondly, it allows you to identify future leaders. Dedicated and motivated employees who go above and beyond could be the ideal candidates for progression within the company and driving your business forward in years to come.

Lastly, employers can benefit from a more productive workforce when people do overtime. Again, as it’s unpaid, it is entirely up to the employee whether they choose to work extra hours or not. However, those who do tend to be more productive outside of their contracted hours as there are fewer distractions, allowing them to produce a higher quality of work.

The cons of doing unpaid overtime

For employees

There is somewhat of a social stigma around unpaid overtime. One of the main reasons for this is that it can lead to burnout, a syndrome of long-term stress.

Burnout leaves people feeling drained, detached, and cynical. According to The Burnout Report by Mental Health UK, 45% of employees agree that regularly working unpaid overtime causes stress and may have contributed to their burnout.

Employees who suffer from workplace burnout are often less productive than those who don’t. They’re also at risk of absenteeism, fatigue, and poor job satisfaction.

Excessive work can also disrupt an individual’s work-life balance. While some employees believe that the more time they spend at work, the better, their personal time is equally valuable. Taking deserved time off is crucial to their professional success as it helps them recharge, improves their time management skills, and reduces their chance of sickness and absenteeism.

Lastly, those who work unpaid overtime with the hope of being promoted (or rewarded in some other way) should ensure that their organisations support and facilitate this approach.

They should not be doing extra work solely out of fear of losing their jobs if they don’t work overtime. The company culture should be one that consistently rewards hard work and dedication. Otherwise, it can result in resentment and prevent employees from progressing in their careers.

For employers

Burnt-out employees are not a good sign for employers. It could indicate a toxic work culture, an environment in which morale and productivity are low. The absence of these key elements can significantly stifle your business growth.

In addition, excessive unpaid overtime can lead to a decrease in your employees’ engagement. If your staff members regularly feel the need to work extra hours, it could indicate an underlying issue that needs to be addressed and the company should do what it can to help.

For example, you may need to hire additional staff to balance the workload and help reduce stress. If nothing is done to make changes where possible, it could negatively impact your employees’ health and wellbeing as well as the wider business. In addition, you could risk losing valuable staff members and even increase your turnover rate.

If your staff work too much, your business could suffer from a drained, unfocused, and unmotivated workforce. Therefore, to foster overtime in the workplace effectively, it should be monitored and balanced.

However, this can be difficult for your HR team to manage, especially if you have remote or hybrid staff. One way to control overtime is to encourage employees to take their lunch breaks.

Legal considerations for employers

Whether or not your staff members have to/can do unpaid overtime will depend on their employment contract. Some companies specify that employees are required to do a certain amount of overtime, and some express that they are expected to do overtime as and when to facilitate the business.

If there is a contractual obligation to work additional hours, the total amount a person works cannot exceed 48 hours a week (unless your business has opted out of this rule, or your nature of work is not covered by it).

In addition, if the contract requires overtime but does not specify remuneration, then there is no requirement to pay employees for extra work beyond their contracted hours – if the pay for all hours is not less than the National Minimum Wage.

Otherwise, if an employee’s contract does not ask them to do overtime in any capacity, then they cannot be forced to do so. There may be a general expectation for staff to complete extra work (perhaps it’s common in your industry or you feel it’s the right practice for your business), but in this case, it is their choice.

Summary

Working overtime sensibly can benefit staff who are aiming for a promotion or want to control their workload. They are well within their right to choose whether they wish to do unpaid overtime or not.

In turn, businesses can thrive with extra, high-quality input from their team and productive employees who make great prospective leaders.

However, unmanaged overtime is where the dangers of burnout can start to present themselves. Employers have a duty to look after their team’s physical and mental health. So, while some unpaid overtime can be expected, it should be monitored to ensure a healthy work-life balance.

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