New legislation to simplify holiday entitlement & pay

The government has introduced new legislation to simplify holiday entitlement and holiday pay calculations. Our team of employment experts have summarised the key points below.

New definition of ‘irregular hours worker’

• In relation to a leave year, a worker is an irregular hours worker if the number of paid hours they work in each pay period during the term of their contract is wholly or mostly variable.

New definition of ‘part-year worker’

• In relation to a leave year, a worker is a part-year worker if they are required to work only part of that year. There are periods within that year (during the term of the contract) of at least a week which they are not required to work and for which they are not paid. This includes part-year workers who may have fixed hours – for example, teaching assistants who only work and are paid during term time.

Holiday entitlement accrual for part year and irregular hours workers

• For leave years beginning on or after 1 April 2024 – holiday entitlement for these workers will be calculated as 12.07% of actual hours worked in a pay period (this is based on the statutory minimum holiday entitlement only).

Rolled up holiday pay for part year and irregular hours workers

• For leave years beginning on or after 1 April 2024, employers may use rolled-up holiday pay as an additional method for calculating holiday pay for irregular hour and part-year workers.
• The calculation of holiday pay by employers is 12.07% of a worker’s total pay, based on a worker’s total pay in a pay period the holiday pay should be paid in addition to and at the same time as the worker is paid for the work done in each pay period.

If your business needs help with the new legislation that’s been introduced to simplify holiday entitlement and pay calculations, our employment law team can help.

Our Legal 500-rated employment law team are experts in guiding businesses of all sizes and backgrounds through a range of issues that may arise, whether that’s redundancy and staff reorganisation, restrictions on competition post-employment, protecting confidential business information, employment and consultancy contracts and more.