New holiday entitlement regulations will see salary costs increase by 3% for some organisations

New holiday entitlement regulations will see wage costs increase by 3% for some employers, a legal expert has warned.

Under the Working Time (Amendment) Regulations 2007, which is expected to come into force on 1 October 2007, full-time workers will have their holiday entitlement increased from a minimum of 20 days paid annual leave, to 24 days, and then to 28 days on 1 April 2009.

According to law firm Bird & Bird, it means that all workers will have a minimum of 20 days of paid holiday in addition to eight bank holidays. This translates into a 40% increase in their holiday entitlement and wage costs for some employers will increase by more than 3% as a result.

Bird & Bird has urged employers to adjust their holiday policies to comply with the new legislation.

Elizabeth Lang, employment lawyer at Bird & Bird, said: “This change is going to have a real financial effect on many employers. This may particularly be the case in sectors that rely heavily on agency workers and other seasonal and hourly paid workers, who are commonly only given the statutory minimum paid holiday entitlement of 20 days.

“Even employers who currently offer more than 28 days of paid holiday to their workers will have to make adjustments to comply with the new regulations governing the administration of holiday. There will be less freedom to allow employees to carry holiday over from one year to another and to make payments in lieu of holiday,” Lang added.