Employment Law: Holiday Pay & Entitlement Reforms | April 2024
In case you have missed it, the government has set out the changes to the Working Time Regulations from 1 January 2024 and particularly how this might impact on anyone in your workforce employed on an irregular working pattern. The reforms were introduced in an attempt to simplify the complex area of holiday entitlements and calculations in the Working Time Regulations.
The government guidance focuses on the legal minimum entitlement of 5.6 weeks’ paid holiday. Many workers will have contracts entitling them to additional paid holiday beyond the statutory minimum. This additional holiday is known as contractual holiday entitlement.
As indicated a key area covered by the reforms are irregular hours workers: described as any worker whose number of paid hours is wholly or mostly variable.
For workers who are not irregular hours or part-year workers, there is no change in how their statutory holiday entitlement is accrued.
There are examples that you can access via the Gov.Uk website so we would advise that you look here in the first instance. There main guidance is as follows:
‘For leave years that begin before 1 April 2024, holiday entitlement will continue to be calculated in the same way for irregular hours and part-year workers’.
‘For leave years beginning on or after 1 April 2024, there is a new accrual method for irregular hour workers and part-year workers in the first year of employment and beyond. Holiday entitlement for these workers will be calculated as 12.07% of actual hours worked in a pay period’.
You may also wish to note that the regulations allow employers to use ‘rolled-up holiday’ pay which was previously regarded unlawful. This is good news for employers, which will simplify the administration of irregular hours workers and their holiday pay. An additional method for calculating holiday pay for irregular hour and part-year workers only, for leave years beginning on or after 1 April 2024. The calculation of holiday pay by employers is 12.07% of a worker’s total pay as 12.07% is the proportion of statutory annual leave in relation to the working weeks of each year,
Whilst this guidance is not a substitute for any advice that you may need relating to individual cases, this should provide a great start point for your general policies and practices in this complex area.
cHRysos HR can provide advice on specific cases if needed.
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