Earlier this month, the Department for Business and Trade published its responses to the two consultations which ran earlier this year. These consultations presented two sets of proposals aimed at reshaping holiday rights, with the recently released responses confirming fresh regulations. It’s anticipated that many employers are to be impacted by these holiday pay reforms.
The key points are as follows:
- The government has decided not to move forward with the suggestion of implementing a 52-week holiday entitlement reference period. Instead, employers will calculate holiday entitlement for irregular hours and part-year workers by employing an accrual method based on 12.07% of hours worked in the pay period.
- Rolled-up holiday pay will be permitted, only for irregular hours workers and part-year workers.
- The two existing rates of holiday pay will not be merged, meaning there will continue to be different methods of calculating pay for these two periods of leave.
This means that:
– 4 weeks will continue to be paid at normal pay.
– 1.6 weeks will continue to be paid at the basic rate of pay.
These changes are due to apply for leave years starting on or after 1st April 2024.