What are employee rights when it comes to holiday pay entitlement?
When it comes to holiday pay entitlement, as you may already know full time workers who work a 5-day week, must receive 28 days paid annual leave per year.
This figure of 28 days in calculated by multiplying a normal working week (5 days) by the annual entitlement of 5.6 weeks.
Pro-rata, those who work part time are entitled to the same. The annual leave calculator for part time workers is to multiply the amount of days that they normally work in a week by 5.6. For example, if a worker usually works 3 days per week, their leave is 16.8 days of paid holiday (3 days x 5.6).
In terms of the remuneration for holiday entitlement, a week’s pay is worked out according to the kind of hours that an employee works and how they’re paid for the hours. Workers are entitled to a week’s pay for each week of leave that they take.
For example, for someone working on fixed hours, fixed pay or part time hours, the employee will receive holiday pay equalling how much they would normally receive for a week’s work.
Shift workers or those with fixed hours full or part time will receive a weeks holiday pay that equals the average number of weekly fixed hours that a worker has done in the previous 12 weeks at their average hourly rate.
For casual workers that have no fixed hours a week’s holiday pay is the average pay that a worker received over the previous 12 weeks that the worker was paid for.
This means that any weeks where a worker did not work or receive any pay, they should be ignored and you should count back a further week.
Holiday pay entitlement has recently changed however and the working time directive has been change as per a UK Court of Appeal ruling which now states that holiday pay entitlement should take into account overtime pay.
This now means that employees who usually receive overtime as part of their “normal pay” should receive the same amount of money when they take a holiday.
IRIS Payroll can help with this update in legislation as included within the software is a “working time directive report”. This “annual leave calculator” produces a report that will show earnings etc on a pay period basis, per employee which will assist you in calculating the correct amount of holiday pay.