Untangling Holiday Entitlement

Say the words ‘holiday entitlement’ to any employer and they’re likely to come out in a rash.

This particular part of running a business can be riddled with difficulties and uncertainties, from the reshuffling of staff to cover absences to the actual working out of entitled leave. But it needn’t be a headache, because the amount of holiday your employees are entitled to is actually pretty simple…

Let’s break it down…

In a nutshell, almost all workers are legally entitled to a minimum of 5.6 weeks’ paid holiday per year. This is their ‘statutory leave entitlement’ or ‘annual leave’. So whether they’re full-time, part-time or zero hour contracted, they’re still entitled to 5.6 weeks holiday per year. And guess what? You can include bank holidays as part of this statutory annual leave (however badly it’s received by your staff!).

Do the maths…

Thankfully, there’s a failsafe calculation you can do if you’re unsure of the numbers. Simply multiply the number of days your employee works a week by 5.6. So for five days a week they’d be entitled to 28 days’ annual paid leave a year and for three days a week they’re entitled to 16.8 days. And so on and so forth…

For employees working a six day week, however, annual leave is capped at 5.6 weeks. So not 33.6 days. It’s good to remember that little clause!

For ‘irregular’ employees…
This is where you may think it gets complicated. But, thankfully, the calculation remains nice and simple. If a member of staff works four 12 hour shifts followed by four days off, the average working week is 3.5 12 hour shifts. So going back to the simple calculation, it would be 3.5 x 5.6, which equals 19.6.

Zero hour contracted staff…
Ok, so this is where things get a little more complicated. It can be a bit of a painful task accruing leave for zero hour contracted staff, so professional guidance is definitely advised. You know where we are!

Extra leave…
Depending on how generous you’re feeling, you can choose to offer more leave than the legal minimum. It’s completely up to you and you don’t have to apply all the rules that apply to statutory leave. For example, you may want to only give extra leave to those who have been with the company for a certain length of time.

Be warned…
There have been a few changes to leave that you may not know about. For employees who work a fair amount of overtime or are in a substantial commission-based role, their holiday daily rate of pay needs to reflect this. So, if their contract is £125 a day but they generally earn £250 a day, they can challenge it if their holiday pay reflects the lesser amount. So you definitely need to be savvy about this and make sure you’re not shooting yourself in the foot!

So it seems a scary monster can become quite the pussycat if you apply some simple maths. But for the less conventional employee set-ups, give us a call and we can talk you through it. Happy holidays!

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