The law on holiday pay has changed as of 6-Apr-20

Several landmark cases have changed the law on holiday pay. This affects all workers including Full or part-time employees, Agency workers and zero-hours workers.

The principle is that a worker (employee) should receive the same pay while on holiday as they would at work.

Employers must now follow the new law:

1. All workers are legally entitled to 5.6 weeks paid holiday per year
2. Calculate holiday pay using a 52-week holiday reference period
3. Stop using ‘Rolled-up‘ holiday pay

Does this affect me?

If the answer is yes to any of the questions below, then yes!

• Do any of your employees receive a regular commission, overtime, bonuses, tips or any other variable pay?
• Do you pay holiday pay using 12.07% multiplier?
• Do you have any workers with zero-hour, irregular or no fixed work pattern?
• Have any of your employees had a change in pay?

You must follow the new law. You cannot continue to pay ‘Rolled-up’ holiday pay. You must ensure your workers take 5.6 weeks holiday per year and you must pay them for each holiday taken. Holiday pay requires a complex calculation using a 52-week average excluding unpaid weeks. Because of the complexity, you will need software that can do this for you.