How new legislation affected the rule for holidays carry over
As of January 1, 2024, the UK implemented significant reforms to holiday entitlement and pay calculations, impacting how employers manage holiday carryover. These changes aim to clarify and standardize holiday rights for workers, including those on irregular hours or part-year contracts.
Key Changes:
- Carryover of Untaken Holiday:
- Workers unable to take their full annual leave due to specific circumstances are entitled to carry over up to 28 days of leave into the following leave year. This applies in situations such as maternity leave, other family-related leave, or long-term sick leave. Ashfords
- Calculation of Holiday Pay:
- The definition of 'normal remuneration' for the purpose of calculating holiday pay has been clarified. It now includes payments like commission, bonuses, and overtime that are regularly received. This ensures that holiday pay reflects the true earnings of workers. DLA Piper Knowledge
- Accrual Method for Irregular Hours and Part-Year Workers:
- For leave years beginning on or after April 1, 2024, a new method calculates statutory holiday entitlement for irregular hours and part-year workers. Holiday entitlement will be calculated as 12.07% of actual hours worked in a pay period. GOV.UK
Implications for Employers:
- Policy Review: Employers should review and update their holiday policies to align with these changes, ensuring that all workers are aware of their rights and the procedures for carrying over untaken leave.
- Record-Keeping: Accurate records of hours worked and leave taken are essential to comply with the new accrual methods and carryover provisions.
- Communication: Employers must inform workers about their holiday rights, including the circumstances under which leave can be carried over and the methods used to calculate holiday pay.
By adhering to these reforms, employers can ensure compliance with UK employment law and support the well-being of their workforce.
