Holiday Pay changes – April 2020″

In February 2019, the department for Business Enterprise and Industrial Strategy issued guidance for employer on the calculation requirements for holiday for employees without fixed hours or pay. Found at https://www.gov.uk/government/publications/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay/calculating-holiday-pay-for-workers-without-fixed-hours-or-pay–2

Following on from recent rulings in relation to overtime and commission, the guidance aims to clarify the current 12 weeks average pay entitlement.

Most employers will find that their current method of holiday calculation may not conform.

Clarification is also provided on the impact of monthly payments and the requirements for a 12 week average. Many will average 3 months over a 13 week equivalent period, however, this may now be considered not accurate!

The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulation 2018 which can be found at http://www.legislation.gov.uk/uksi/2018/1378/contents/made increases the averaging period from the current 12 weeks to 52 weeks, ignoring any zero weeks, even for monthly paid.

Holiday pay has now become increasingly difficult to establish and calculate the correct amount!

I’m interested to understand how UK PLC employers are going to implement the change:

-are employers reviewing their current schemes to ensure compliance with the new BEIS issued guidance?

-what changes are as a result of this new guidance?

-is preparation underway for the expansion to a 52 week average (over a maximum 2 year period)?

-is this seen as impacting HRM or payroll systems or both?

-what part will Time and Attendance systems play in the assessment and calculation of holiday pay?

April 2020 seems a long time away, especially as we have only just finishing Tax Year End.

Who is going to solve this new HRM and Payroll challenge?

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