With the ever-changing COVID-19 travel restrictions, vaccine passports, and quarantine rules, booking a holiday has never been more confusing. But what about
holiday pay? Is it a legal responsibility to pay your staff for holidays?
The short answer is ‘yes – but the ins and outs of annual leave entitlements are a
little more complex. By law, an employer must provide paid leave. But how much
should you offer? Can you refuse to leave? And what about part-time or zero-hour
workers? In this guide, we will outline the holiday pay facts that every employer
needs to consider.
Who is entitled to holiday pay?
All contracted workers, without exception, are entitled to 5.6 weeks of paid holiday
per year. It sounds like a lot, so how does that number work in practice? To work out
how much paid holiday an employee is entitled to, take the number of days they
work per week, and multiply this by 5.6.
For example:
-A full-time employee working five days a week must receive at least 28 days’ paid
holiday a year (5 x 5.6 = 28).
– A part-time employee working two days a week must receive 11.2 days’ holiday
(2 x 5.6 = 11.2).
How much should they get?
As an employer, it’s up to you whether or not to include the UK’s eight bank holidays
as part of annual leave entitlement. It’s also worth noting that the legal minimum paid
holiday is 28 days, so someone working six days a week is still not entitled to more
than 28 days’ annual leave.
Agency workers and those with irregular hours, such as individuals on a zero-hours
contract, must also receive holiday pay. It’s usually easier to calculate this based on
the number of hours worked, as they may not have a set number of working days per
week. The government has developed a holiday entitlement calculator to make
this process easier.
Can staff carry over untaken leave into the following year?
Some holiday entitlement can be carried over into the following year, but this is only
a small amount – a maximum of 8 days for a worker with 28 days’ leave. This means
a worker will lose most of their holiday if they do not take it, so it is the employer’s
responsibility to encourage staff to take all their allowed leave.
The rules were recently relaxed for key workers whose leave has been affected by
COVID-19. These workers can now carry over up to 4 weeks’ unused leave into the
next 2 years.
Booking time off – what is the government guidance?
An employee is usually expected to give notice if they want to book time off. It is
usual for the notice period to be at least twice as long, plus one day, as the amount of
leave a worker plans to take. This would mean, for example, 15 days’ notice for a
week’s leave.
As an employer, you do not have to accept a leave request. However, when refusing
or cancelling leave you should give as much notice as the amount of leave
requested, plus one day – this would be 8 days’ notice for one week’s requested
leave.
Employers are also within their rights to tell workers when they can and cannot take
leave. For instance, asking employees to take leave over Christmas, or restricting
leave during busy periods. When asking staff to book leave, an employer should give
a notice period of twice the amount of leave they are asking employees to take.
While these notice periods are common practice, if a contract specifies a different
system, the contract will apply. Nonetheless, for planning purposes, as well as staff
morale, it is beneficial to have a fair and effective system in place for booking leave.
How we can help?
It is a legal requirement to pay your staff for holidays, but the rules can seem
complex. If you need help to navigate the world of annual leave entitlement, Cangafs
friendly and experienced team of bookkeepers are here to help. Give us a call on
01204860128.
