Overview

premium payment


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An enhanced rate of pay which is offered when employees work overtime, on a shift system, at weekends, or in accordance with some other arrangement of working time which requires attendance at unsocial hours. Premium payments have traditionally been expressed as a multiple of the hourly rate for a given job, so, for example, a worker working overtime may earn ‘time and a half’ or ‘double time’ (i.e. one and a half or twice the hourly rate). Underlying payments of this kind is the assumption that the time workers commit to their employer is of variable value and time spent at work after the course of a normal shift or at night time and weekends is more valuable and therefore deserving of a higher rate of compensation. In some industries, there has been a movement towards the removal of premium payments through annual-hours schemes and seven-day working. Employers seeking greater flexibility in the organization of working time have tried to eliminate premium pay, particularly for weekend working, arguing that in service industries Saturday and Sunday should be counted as normal working days. [See hourly rate, penalty rate, and time-rate.]

Subjects: Human Resource Management.


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