Do Employers Have To Pay Shift Allowance?

Estimates vary as to exactly how many shift workers there are in the UK, but figures generally sit around the 4 million mark – making up around 15% of the workforce. Shift workers are incredibly important to the economy, and yet they find themselves making huge sacrifices in terms of sleep patterns and a healthy work life balance in order to do their jobs. Many who take on shift work do so because it suits them, but for others the changing shifts can be a huge adjustment. As such, they’re usually compensated for the unsociable hours they have to work. This is known as a shift allowance.

As an employer, it’s your job to ensure any shift workers on your payroll are cared for and compensated properly for the sacrifices they make for your business. Failing to care for your employees who work unsociable hours can result in high turnover rates, which is never good for any business. If your business relies on 24 hour operation, then you ought to pay your workers fairly for being willing to work in such a way.

So do you have to pay shift allowances to workers who are doing this type of work? Legally, the advice around shift allowance is a bit of a grey area – but at Real Business we care about more than just following the law – which is why below we’ll advise more about why every business owner who makes use of shift workers ought to be paying shift allowances.

What Is Shift Work?

Shift workers are any worker who works a variety of shifts on a rotation – usually morning shifts, afternoon shifts, and night shifts. The exact hours worked will vary for every worker but it could look something like:

• Week 1: Morning shifts – 6am-2pm
• Week 2: Afternoon shifts – 2pm-10pm
• Week 3: Night shifts – 10pm-6am
• Repeat…

As you can see, they’re working outside the hours of what many of us would consider to be a typical working day (7am to 6pm). Shift work can be found in many roles from bartenders and catering staff to factory workers and drivers.

Because shifts are so changeable for these workers, night shift one week, early morning shifts the next, there isn’t a clear definition of what shift work actually is in the UK, but it can be summed up 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?

We see this question a lot because many people’s experience of shift work is from when they were younger and only working part-time at, for example, a bar or restaurant, but shift workers can have full-time contracts, too.

Shift work affects both full and part-time employees, so the difference between a part-time worker and shift worker depends on the type of work they’re doing. You can be a part-time worker without working shifts, or you could be a part-time shift worker – the contract of employment will define the differences between the two workers in this example.

What Are Shift Allowances?

So, what exactly are shift allowances, and why are we questioning if you, as an employer, ought to be paying it? Well, shift allowance is an additional pay that employees receive when working shifts as a way to compensate them for the inconvenience to their personal life and sleeping patterns.

You will almost certainly have heard of night shift allowance, as this is generally considered a requirement for full-time night workers or else any job advertisement is unlikely to be filled as it has become the standard for this category of worker. Whilst there is no separate national minimum wage for night workers, it’s generally expected that if a worker is constantly working nights, then they ought to be properly compensated with higher wages and an additional payment in the form of shift allowance.

But what about those on changing shift patterns who aren’t constantly working nights?

Do Employers Need To Pay Their Employees A Shift Allowance?

The only thing an employer has to pay their workers in the UK, by law, is their minimum wage (which is lower for younger workers, who shift patterns often impact the most). Since the vast majority of shift work is considered entry level, workers will often receive the bare minimum despite their challenging work schedule.

So no, employers don’t need to pay employees who work shift a shift allowance by law – yet many choose to. It’s something of a moral obligation rather than a legal requirement, but most businesses in the UK recognise the importance of their shift workers and how integral they are to production and properly compensate them for the sacrifices they make. This usually means paying them a shift allowance on top of their wages.

Whilst it’s completely up to you as the employer, we would always recommend it. How much you pay is up to you, but some employers pay shift allowances at around 20% of their wage, but you can decide to pay more or less, so long as it’s fair across all employees and they know exactly what % of their wages to expect in shift allowance if you decide to pay one.

What Factors Should You Consider When Deciding How Much Shift Allowance To Pay?

If you’ve decided that you’re going to pay a shift allowance, then the following factors might influence how much shift allowance you decide to pay:

Unsociable Hours

The more unsociable hours a worker works – usually defined as anything outside of 9am to 5pm – the more shift allowance you might want to consider offering. Unsociable hours usually affect evening, night, and early morning shifts. Although not a requirement, it is expected that those working unsociable hours would receive a shift allowance.

Wellbeing

Working irregular shifts are widely accepted to be a leading cause in an individual’s declining mental and physical health. Depending on the type of work an employee does, sleep issues like insomnia, poor diet, depression and isolation can all become very real problems for a person. In order to compensate workers for the risk they are placing on themselves for the benefit of your business, you ought to consider paying a shift allowance to sweeten their pay packet each month, making the work more attractive and recognising their worth.

Pay And Holidays

Don’t forget that shift allowance isn’t the only way you can sweeten the deal for a shift worker. Take a look at their wage. Many people who work shifts will do so with a minimum wage, and you ought to consider whether this is truly fair for the hard work they do. If you can offer them a higher starting salary than other similar businesses, you will instantly set yourself apart as a business that cares for their employees and wants to fairly compensate them for all they do. Consider the number of holidays you offer, the pay you offer for working bank holidays and other public holidays in the UK and think about what other benefits you can offer to compensate your workers effectively.

Benefits Of Shift Allowances

Of course, we’ve made it quite clear today that we think shift allowance is something that ought to be paid when workers have irregular shifts, let’s explore some of the main reasons why we think it’s a great idea.

Loyalty

You’ll promote loyalty to the workplace in your workers when you offer them additional benefits beyond what is legally required. No, you don’t have to pay shift allowance. But for those businesses that do, you’ll find your employee turnover is much smaller over time.

Increased Quality Of Work

Employees who work shifts feel much more valued and appreciated when their role comes with more than just the bare minimum. When an employee feels appreciated and valued in their role, they naturally produce better work for the business, making yours even more successful.

Further Tips For Treating Shift Workers Fairly

Changing Shifts Fairly

If you have to change a shift workers shift, then you ought to give them at least 12 hours notice for a single shift, 24 hours for a change in shift pattern, and one to two weeks for any contract changes.

The law states that shift changes must be given in a reasonable amount of time. The above is one reasonable example, but you and your employees may have a more flexible arrangement depending on the nature of the work and culture of the workplace.

Have A Good HR Rep

You should, as your business grows, invest in at least one HR representative to help deal with issues that are important to employees. Contract changes and employee policies can also be handled by your HR team, as well as hiring and disciplinary procedures. This ensures your employees have a voice and are being treated fairly.

Encourage Short Breaks

Shift work can involve strange patterns and working hours. To recognise this, you should encourage your employees to take short breaks to stay focussed and prevent burnout. Short breaks throughout the day actually encourages productivity.

Plan Shifts In Advance

If you’re the type of business that allows individuals to request shifts for the month, then you should make sure you get any requests in early to help you plan well in advance. Once shifts are posted, you should, where possible, allow workers to switch shifts if necessary to ensure satisfaction. The key to keeping everyone happy is being prepared and scheduling shifts well in advance.

Other Legal Obligations For Employers Who Employ Shift Workers

Although shift allowance isn’t a legal obligation for employers, there are other ones you ought to be especially aware of for shift workers:

Rest Breaks

When you work on your schedule for shift workers you have to keep the Working Time Regulations of 1998 in mind. This ensures workers get a sufficient rest period between each shift.

Sleep Shift

Sleep shifts need to be especially monitored. This is still work if an employee is on call and in the workplace, even if they’re sleeping. Legally there must be at least 7 hours between each shift and employee rest should be prioritised always. Sleep shift workers shouldn’t work more than 8 hours within a 24 hour period – but this can be averaged out over 17 weeks. However, where the work they’re doing is considered hazardous, then there is a limit of working 8 hours in any 24 hour window, meaning averages can’t be taken into account.

Underage Employees

Any employees under the age of 18 must be treated differently to other employees when it comes to shift work. They’re unable to complete work during nighttime hours – typically defined as between 11pm and 6am), yet some industries such as the hospitality industry may be exempt.

Free Health Assessment

Any shift workers that are working regular night shifts are entitled to free, regular health assessments to ensure their physical health is in good order.

Do Employers Have To Pay Shift Allowance? Summary

When it comes to shift work, legislation is currently lacking in the UK. Legal obligations may be lacking, but there are certainly moral obligations that must be considered to ensure that you’re treating employees fairly – and shift allowance is just one way fairness can be displayed.

Consider how financial compensation in the form of a shift allowance can compensate your workers who help your business run with long shifts and unsocial hours. Extra pay here can make them feel valued and supported.

We always recommend budgeting for shift allowances if you want to keep your shift workers happy.

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