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NEC ECC: Understanding premium time

+1 vote
Just trying to understand the logic of premium time. I receive my monthly application from sub-contractor. They claim 38 hours @£25 an hour, then for overtime they claim premium time. For example 5 hours @ £10 an hour

So client pays sub contractor
38hrs @ £25 = £950
5hrs @ £10 = £50
TOTAL £1,000

Question is… why is the premium time lower than the actual hour rate (are these costs only for the individual or only for the company? – why is the client not paying extra for over time

Currently an option C - NEC
asked Jul 27 in Payment by Hrunner (280 points)  

1 Answer

0 votes
It looks like the 5 hours are part of the 38 hours, but worked outside 'normal hours' and therefore attract an enhanced rate, which equates to £10 an hour.

The calculation should probably be something like;

33 hours @ £25 = £825
5 hours @ £35 = £175
Total   £1,000

I am assuming that there is an agreement on how 'overtime' hours are dealt with under the contract, what constitutes 'overtime' and how such hours are 'approved' by the PM..
answered Jul 27 by Andrew WI (13,450 points)