NEC ECC: Understanding premium time

NEC3 and NEC4 Contracts Payment
1

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

1 Like
2

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…