Get ready for April 2020, review your annual leave policy.

More than 1.8 million workers in Britain do not receive their holiday pay guaranteed by law. Find out more about what you should put in place around annual leave entitlements.

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Annual leave is a guaranteed right for all types of employees/workers in the UK and an integral part of a healthy work-life balance. The UK laws governing annual leave and holiday pay entitlements are subject to regular reviews and updates. Therein it might be easy for small to medium size employers to make oversights resulting in employees that are dissatisfied and unmotivated, as well as the consequence of legal action and penalties. In this article, we focus on forthcoming updates you should apply to your organisation.

The minimum statutory requirement of paid holiday each year for a full-time UK employee/worker is 28 days (5.6 weeks), including public holidays. Part-time workers are also entitled to a minimum of 5.6 weeks calculated on a pro-rata basis. However, in recent years, there have been significant changes to regulation surrounding the calculation of holiday pay, with case law now requiring that all overtime and commission payments should be included. Further changes are planned to become effective in April 2020.

In April 2020, the government is extending the reference period used when determining an average week’s pay, from 12 weeks to 52 weeks. This change may improve holiday pay for certain groups of employees who have been losing out because of the previous method of calculation. Furthermore, a recent decision of the Employment Appeal Tribunal has cast doubt on the practice of calculating holiday accrual for part-year workers. The case prevailed that employers who employ such workers should review their method of calculating holiday entitlement. Before April 2020, employers of all personnel types must ensure that their annual leave offerings are up to date, compliant and competitive.

Stress and exhaustion can lead to decreased employee performance and job satisfaction. Employers that embed good practice in annual leave entitlement show active support for employee welfare, which can generate a positive effect on the bottom-line by improving staff morale and therein productivity.

Resolution Foundation, a prominent think tank, recently issued a report exposing the scale of violations in the UK jobs market. More than 1.8 million workers in Britain do not receive their holiday pay guaranteed by law. Subsequently, the government launched a public awareness campaign -“Holiday pay - It comes with the job”, which highlights the premise of the report. The campaign tackles issues around the rise in zero-hours contracts as well as temporary and agency employment. Self-employed contractors who operate within the gig economy have contributed to a rise in employment status disputes. They identify as normal workers and therefore seek employment rights, such as sick and holiday pay. Buzzacott HR Consultancy is available to assist clients to stay up to date on relevant case law and its possible implications while we await an official government stance on annual leave entitlements across different types of workers.

Checklist for annual leave entitlement

Checklist for annual leave entitlement:

  • Benchmark your annual leave allocations against other organisations 

This ensures that your offering is competitive and will attract the highest standard of applicant. This review involves a comparative analysis using factors such as industry sector, UK region and organisation size.

  • Establish policies

Ensure policies are in place for purchase and sale of annual leave, this supports with employee flexibility, making your organisation more attractive to potential applicants.

  • Tracking annual leave entitlements

Monitoring should be in line with your leave entitlement period, so that at any one time any employee/worker can view outstanding leave or a summary taken. It is imperative to calculate the entitlement for leavers ensuring final salaries are accurate upon termination of employment. This will help to avoid costly clawback arrangements or potential legal action.

  • Calculate accrued annual leave across different types of employees/workers

This is especially important if you engage a variety of personnel as different groups have different rights and employer responsibilities.

  • Manage holiday pay during sickness

Calculations should detail; the accrued entitlement of workers on long-term sick leave, those who fall sick while on holiday and those who decide to take holiday while off sick.

How can we help?

How can we help?

The expertise held by the Buzzacott HR Consultancy Team can help you get the best out of your workers, while also promoting a healthy workplace. If you require any further information, support or guidance to ensure your organisation is adhering to best practice in relation to annual leave then please get in touch.

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