When it comes to holiday pay, it’s easy to feel a little confused. There are so many rules, exceptions, and recent changes, especially for those who work irregular hours or are only employed part of the year. If you’ve found yourself wondering what you’re entitled to or how recent reforms affect your situation, you’re not alone.
In this post, we’ll break down the key points around holiday pay, including how the UK’s new 2024 reforms impact workers. Whether you’re employed full-time, part-time, or in a more flexible capacity, you’ll walk away with a clearer understanding of your rights.
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What Exactly Is Holiday Pay?
In the UK, most workers are entitled to paid holiday. Even if you’re not clocking in from 9 to 5 every day, you’re still entitled to time off—and yes, to be paid for that time.
The basic entitlement is 5.6 weeks of paid leave per year. For full-time employees, this is straightforward. You take your time off, and you receive your usual pay. But what if you’re working part-time, or your hours vary from week to week?
How Holiday Pay is Calculated
For full-time or part-time employees with consistent hours, the calculation of holiday pay is simple. You receive your normal weekly earnings for four of the weeks, and the remaining 1.6 weeks at a basic pay rate. However, things get a bit more complex for those who don’t work regular hours or only work part of the year. Let’s break it down.
Regular Hours and Part-Time Workers
If you work a set number of hours, whether full-time or part-time, your holiday pay is calculated based on those contracted hours. Nothing changes here. You’re still entitled to the 5.6 weeks of paid leave, and the amount you’re paid depends on your usual earnings.
Irregular Hours or Part-Year Workers
This is where it gets tricky. For those with fluctuating hours or who only work part of the year (for example, seasonal workers), a different method is used to calculate holiday pay. And from 1st April 2024, a new formula has been in place for these types of workers.
Holiday pay for irregular hours or part-year workers is now based on 12.07% of the hours you work in each pay period. This percentage is applied to ensure that you still get a fair amount of holiday time, even if you’re not working a consistent schedule.
To make it easier for employers and employees, the government has introduced an online holiday pay calculator. This tool helps to figure out how much holiday you’re entitled to, based on your working hours.
What Counts as an Irregular Hours or Part-Year Worker?
You might be wondering if you fall into this category. Simply put, if your work hours change significantly from one pay period to the next, or if you’re hired to work only part of the year, you’re classified as an irregular or part-year worker. This includes:
- Employees with contracts that vary their hours week by week
- Seasonal workers, such as lifeguards or retail staff hired during the holidays
- Workers like teaching assistants who only work during term time but are employed year-round
It’s important to know where you stand so you can be sure you’re getting the right holiday pay.
Key Reforms to Holiday Pay in 2024
The UK government has introduced some significant holiday pay reforms, which took effect on 1st April 2024. These reforms aim to simplify the process for workers with irregular hours or part-year contracts. Here’s a summary of the most important updates:
- Clarification for Irregular Hours and Part-Year Workers
The new rules clearly define what constitutes irregular hours and part-year employment, making it easier for both employers and workers to calculate holiday entitlement. - New Calculation Method for Irregular Workers
Workers with fluctuating hours or part-year contracts now have their holiday pay calculated using 12.07% of their hours worked during each pay period. This ensures holiday pay is fair and proportionate to the time worked. - Changes for Maternity, Family, and Sick Leave
For irregular or part-year workers who go on maternity, family, or sick leave, there’s a new way to calculate how much holiday they’ve accumulated. While the details can be complex, it ensures workers in these situations aren’t short-changed on their holiday entitlement. - Rolled-Up Holiday Pay Now Allowed
One of the bigger changes is the introduction of “rolled-up holiday pay”. This means that holiday pay can now be included in your regular wage packets, which is a departure from the previous system. It’s worth noting that this is only allowed for workers with irregular hours or part-year contracts. - Maternity and Sick Leave Updates
For those working irregular hours or part of the year, the way holiday entitlement is calculated during maternity or sick leave has changed. The goal here is to ensure that your holiday pay is still reflective of the time worked, even when you’re not actively working due to these types of leave.
Rolled-Up Holiday Pay: What You Need to Know
If you’ve never heard of “rolled-up holiday pay” before, you’re not alone. This new approach allows your holiday pay to be included in your normal wages, rather than receiving a separate payment when you take your holiday. While this simplifies things, it’s essential to know if your employer is using this method and how it impacts your overall pay.
If you work irregular hours or are only employed for part of the year, rolled-up holiday pay is an option now available. This can help smooth out your earnings across the year, but it’s important to understand how it’s calculated to avoid any surprises.
Stay Informed About Your Rights
Navigating holiday pay can be confusing, especially with recent changes to the rules. If you work irregular hours or are employed part of the year, these new reforms are designed to make things clearer and ensure you receive your fair share of holiday time.
If you’re unsure about your entitlement, it’s always worth double-checking with your employer or using the government’s holiday pay calculator.
