The Department for Business and Trade has published guidance on calculating holiday entitlement and holiday pay, focusing particularly on the rights of part-year workers and those working irregular hours.
The guidance which includes case-studies and examples to provide guidance on the new reforms introduced to simplify holiday entitlement and holiday pay calculations in the Working Time Regulations.
These reforms include:
- defining irregular hours workers and part-year workers in relation to the introduction of the holiday entitlement accrual method and rolled-up holiday pay (see section 2)
- introducing a method to calculate statutory holiday entitlement for irregular hours and part-year workers (see section 3.1 of the guidance)
- introducing a method to work out how much leave an irregular hour or part-year worker has accrued when they take maternity or family related leave or are off sick (see section 3.4 of the guidance)
- removing the Working Time (Coronavirus) (Amendment) Regulations 2020 which affect the accrual of COVID-19 carryover of leave (see section 4.1 of the guidance)
- maintaining the current rates of holiday pay where 4 weeks is paid at normal rate of pay and 1.6 weeks paid at basic rate of pay, whilst retaining the 2 distinct pots of leave (see section 5.1 of the guidance)
- defining what is considered ‘normal remuneration’ in relation to the 4 weeks of statutory annual leave (see section 5.1 of the guidance)
- introducing rolled-up holiday pay as an alternative method to calculate holiday pay for irregular hours workers and part-year workers (see section 5.2 of the guidance).
The link to the guidance can be found here: https://www.gov.uk/government/publications/simplifying-holiday-entitlement-and-holiday-pay-calculations/holiday-pay-and-entitlement-reforms-from-1-january-2024