HOLIDAY PAY CALCULATIONS
The way you calculate holiday pay for your employees may
need to change to allow for recent court judgements indicating a change in
legislation will soon follow.
ACAS have detailed guidance on their website (www.acas.org.co.uk) but we have summarised
the key points below;
An employee should receive holiday pay based on a week’s
normal remuneration, whatever that may be to them, not just on their contracted
basic hours (unless that is all they work)
The following payments should now be considered when
calculating statutory holiday pay
Guaranteed and non-guaranteed overtime (currently there is no case law
suggesting voluntary overtime needs to be taken into account)
Commission
Work-related travel
Other regular payments (e.g bonuses)
It is suggested that holiday pay for those employees with
various payments to be included in the calculation is worked out based on an
average of 12 weeks of earnings. These weeks should not include nil paid
periods or periods of statutory payment.
PAYMENT IN LIEU OF HOLIDAYS
Also a reminder that employees are entitled to 5.6 weeks
holiday per year in the UK. This must be taken and cannot be paid
in lieu. Only holidays provided by the employer above the statutory allowance
can be paid in lieu if stipulated in the employment contract.
If you require any further information
please do not hesitate to contact our office on 03333 202 409 or 01472 345888.
