Holiday Pay Hell (Tip)

Do you add 12.07% on to your staff wages in lieu of holiday pay? This is sometimes referred to as the holiday pay roll up. Your staff get extra every pay day but don’t actually get paid when they take holidays.

A recent case in the UK Supreme Court has cast doubt on the legality of this practice.

So, workers permanently employed need to be given a full entitlement of 5.6 weeks paid annual leave, with the holiday pay calculated based on their average salary over 52 working weeks.

Seasonal or those working under zero hours contracts can no longer have their annual leave pro-rated for the number of days or weeks in the year that they actually work and have 12.07% added to their normal wages.

In many cases they will be better off under the new rules and you may find that they want back pay.

If you think you may be affected by this change, then this is probably the time to take professional advice.



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