6 Key Points from ACAS to Help Clarify Holiday Pay Changes

By Sam Thomas | 11th August 2016 | 14 min read

The way businesses calculate holiday pay is changing, and in response, ACAS have published 6 key points of clarification to help businesses.

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The new rulings for holiday pay calculations have not been written in to UK legislation as of yet. The Government has a taskforce in place to interpret the rulings and detail how they should be implemented. Currently, there is no guidance for calculating holiday pay other than it should be done consistently within the business. Consequently, other pay elements maybe included in the future.

ACAS state that the rules employers and workers follow to calculate holiday pay may need to be updated as a result of these court cases. They list six key points which businesses in the UK should now be aware of:

1. Guaranteed and non-guaranteed overtime should now be considered when calculating a worker's statutory holiday pay entitlement, however there is currently no definitive case law that suggests voluntary overtime needs to be taken into account

2. Commission payments should now be factored into statutory holiday pay calculations

3. Work-related travel may need to be factored into statutory holiday pay calculations

4. A worker's entitlement to holiday pay will continue to accrue during any period of sick leave

5. There are different rules for calculating holiday pay depending on the working patterns involved

6. Workers must take their statutory paid annual leave allowance and can only be 'paid in lieu' for this when their employment ends

What to Do Next

Whilst not written into legislation yet, changes to holiday pay are coming. If you’d like your business to get a head start with holiday pay, look no further than the IRIS Holiday Pay Module. Available for IRIS Payroll Professional and both Earnie Executive and Earnie Business, the IRIS Holiday Pay Module offers a flexible solution to configure holiday pay automatically, taking away the time and inconvenience of manually calculating your employee's holiday pay.

Your employees will be assessed from their previous 12-weeks’ total earnings. This means that commission and overtime will be included and your workforce will be paid fairly when taking time off.

If this sounds good, then click below to register your interest in the revolutionary IRIS Holiday Pay Module and get your free software demonstration to see if in action.

 Book My IRIS Holiday Pay Module Demo