The government has published guidance setting out how holiday pay should be calculated for part-year and irregular hours workers, as well as other 2024 holiday pay changes.
The Department for Business and Trade’s guidance on holiday pay and entitlement reforms from 1 January 2024 advises how employers should apply the recent changes to the holiday pay provisions of the Working Time Regulations.
The majority of the changes apply from leave years beginning on or after 1 April 2024, including the introduction of the new accrual method for irregular hours workers and part-year workers of 12.07% of their actual hours worked in a pay period.
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However, some changes applied from 1 January, including changes relating to the amount of leave they can carry over into the following year and the removal of regulations that allowed workers to carry over leave that could not have been taken because of the Covid-19 pandemic.
The guidance sets out the definitions for an irregular hours worker and part-year worker and provides examples for each. An employment law expert previously criticised the definition of an irregular hours worker in the government’s draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 as being too vague.
The guidance also sets out:
- how statutory holiday entitlement is accrued and calculated
- what calculations an employer should do if an employee leaves a job part-way through a leave year, to check they have received the statutory minimum or if a payment in lieu is necessary
- how statutory entitlement is accrued by part-year or irregular hours workers while they are on maternity or other family-related leave, or off sick
- how employers should calculate rolled-up holiday pay.
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