Shift Allowance UK - What Is It And How Does It Work?

Shift allowance is a discretionary payment that some companies choose to offer their employees who work irregular shifts or unsociable hours.

As this type of financial compensation isn’t a legal requirement under employment law in the UK, if you’re working in HR you may be wondering how to manage shift allowance for your staff and if you’re an employee working shifts, you may be wondering if you’re entitled to receive shift allowance in the UK. 

Read on to find the answers to both of these questions and further key considerations around the topic of shift allowance in the UK. 

If you need advice on managing shift allowance, our expert team is here to help. Contact us today for advice on HR and employment law 

According to the  ONS, in Nov-Jan 2023, the average full-time working week in the UK stands at 36.7 hours but when these hours are worked will throw up questions of shift allowance and rates of pay.

With HR and employment Law being so tightly regulated and high penalties for non-compliance, it’s important to know where you stand when it comes to crucial matters like paying employees for the work that they do. Whether full-time or part-time, if this work is done outside of usual office hours, then it’s a good idea to check if you need to pay employees differently because of this.

What does the law say about pay and shifts? 

There are strict laws governing how much employees are paid, when and where they can and can’t work, and the breaks they are entitled to take based on their age or working hours. Outside of this though, employers can exercise their own discretion on the rate of pay and shift patterns that they offer to employees. 

In the UK, employers are legally required to pay all workers the national minimum wage applicable based on the individual’s age. For tax year 2023/24, this is set as follows.

You can check the rates for the current tax year at any time by visiting gov.uk 

There are also rules about when younger workers can and cannot work, for example, 16 and 17-year-olds cannot work between midnight and 4 am and usually can’t work between 1 pm and 6 am either.

Outside of this, and barring any exceptions specifically legislated for, it is up to the employer's discretion and the needs of the business to set working patterns for all employees. 

Exceptions to these rules are granted, particularly within;

• agriculture,
• sport,
• hospitals,
• hotel,
• catering,
• retail and
• postal delivery sectors.
  
  

Workers are required to take regular breaks and not work more than an average of 8 hours in a 24-hour period, usually calculated over a 17-week period. 

This means that, although it may be unfavourable to many people to work through the night, employers are not legally required to pay you any more than the minimum wage to fulfil these hours, but many choose to do so. 

If offering a shift allowance, employers will usually state this in their contract of employment including what hours fall into unsocial hours based on the business they run as well as the level of additional pay this will attract. 

Most employers realise that employee incentives like this can make a big difference to the level of engagement and staff retention seen within an organisation, particularly when unusual working patterns are required to run the business. 

Unsociable hours and shift allowance 

Despite the rise in working from home and flexible hours, the majority of full-time workers still consider a typical 9 am to 5 pm as the standard working day in the UK. Saying that, there are plenty of industries that require 24/7 staffing to keep up with production or caring obligations for their customers, meaning that working through the night, or working for longer shifts, is not as uncommon as you may think. 

Unsocial hours are generally considered to be any shift or part of a shift that falls outside of a typical working day for a given organisation. When employees decide to work unsociable hours, employers can offer a financial incentive in recognition of them working outside of usual hours or across unsocial shift patterns that may impact traditional family life. This payment is often referred to as shift allowance or unsocial hours pay. 

The rate of pay and the hours that this payment relates to are usually detailed in employment contracts upfront rather than negotiated on a case-by-case basis. When this clause is present, workers will receive additional pay when working agreed unsocial shifts and part-time workers must be treated as favourably as full-time employees so are also entitled to shift allowance if offered by the company.

Rate of pay 

As shift allowance is a voluntary incentive, employers do not have a specific rate of pay that they must offer. As such, the rates of pay for shift allowance will vary between organisation, sector and location and could be anything from 5-20%, time and a half, or in some cases, double time. Whatever rate is offered though, this will be on top of the employee's usual basic rate of pay.

Irregular shift work and shift allowance 

When individuals are required to be ‘on call’, have an irregular shift pattern or very long shifts, then shift allowance may be paid to compensate for the effect working in this way can have on employees' minds, bodies and family life. 

It’s well known that disrupted or irregular sleeping patterns can have a detrimental impact on mental health, and cause excessive tiredness that can have knock-on effects on everyday life if not properly managed. 

Shift allowance is therefore a great way for employees to acknowledge that their staff don’t have to work these irregular hours, but the fact they choose to is very much appreciated.

Working patterns 

Everybody will have a different attitude to working patterns and how they prefer to work. Shift work will suit some people and not others, working very early mornings or very late evenings will be a brilliant option for some but again, won’t be for everybody. Whatever your personal preference is regarding the hours you work, it’s worth knowing about shift allowance and how this may impact your pay packet. 

As an employee, you may be able to keep an eye out for it when changing roles to a more irregular working pattern than the one you’re used to, or if you are an employer, offering a shift allowance can be a great employee incentive to attract and retain valuable members of staff. 

If you need advice on managing shift allowance in the UK, our expert team is here to help. Contact us today for advice on HR and employment law.