Clocks changing and pay calculations

CIPD HR-inform. Croner-i

With British Summer Time (BST) starting on Sunday 29 March when the clocks spring forward, our Croner HR experts explain how this affects pay calculations.

Q: How do I deal with the clocks changing?

My business partner and I own a late-night opening bar in a busy city centre. Our clients generally come in ‘after the party’, as we’re open until 3am.

We’ve had a question from an employee about how we will deal with the clocks changing at daylight savings time. They’re asking if they will get paid the same as usual.

A: In the UK, the clocks change twice a year for daylight savings. They spring forward an hour in spring, when we lose an hour from the day, and go back an hour in autumn, when another hour is added to the day.

Losing an hour (clocks go forward)

In spring, employees will technically be working an hour less in their shift as a result of the clock change, eg, an employee working an eight-hour shift will actually only work for seven hours.

Payment for this time will come down to what is written in the contract of employment. If it sets out that the worker is entitled to hourly pay (paid for every hour they work) then they will only receive payment for seven hours.

If the employee is salaried, it’s likely that they will receive their usual pay regardless of whether they work one hour less. This is because a salaried employee is more likely to be contracted between a specific period and not have their pay calculated by the hours they work. They are also more likely than an hourly paid employee to be required to work extra hours without additional pay and to be entitled to pay even if they work fewer hours.

Employees due to work when the clocks go forward should be reminded that this will happen and told how their employer will be dealing with it. Those due to start work early on Sunday morning are most likely to be caught out, so a reminder of the rules on lateness would be appropriate, as well as encouraging them to prepare for the change.

Gaining an hour (clocks go back)

The effect of the clocks going back in October is that staff whose schedule means they are working overnight, or into the early hours, will have to work an extra hour on daylight savings day. Whether or not you have to pay for this will depend on a few different things. The following examples explain the effect of the contractual wording.

1.       A contract which states the employees’ shift starts at 9pm and finishes at 3am will normally require the employee to work a shift of six hours but on this occasion, they will be working for seven hours. If they are paid hourly, they will need an extra hour’s pay for this shift. If they are salaried, they will only need extra pay if their contract requires it (eg, if it states that any hours worked over a usual set amount will attract overtime pay), or if the extra hour would cause their pay for that pay reference period to fall below national living/minimum wage (this is only a risk if they are paid on or very close to national living/minimum wage).

2.       A contract which says the shift lasts for six hours starting from 9pm will allow the employee to leave at 2am, as they will have technically worked the six hours by this time. In this situation, the employer may consider agreeing with their employee that they will work the extra hour and leave at their normal time, with their wage being amended to reflect this if they are paid hourly. As above, salaried employees’ pay will not usually need to be adjusted in this situation unless minimum wage compliance may be at risk.

Employees due to work when the clocks go back should be reminded that this will happen and told how their employer will be dealing with it. Those due to start work early on Sunday morning are most likely to be caught out, so a gentle reminder so they’re not getting into work earlier than they need to would be appropriate.