Everything employers need to know for 2024
The start of this year saw several changes in how leave works.
These cover how leave is accrued and carried over, as well as a change to rolled-up holiday pay.
This is particularly relevant for part-time workers or those with irregular hours.
Of course, many of these employees work shift-based jobs, making it the perfect topic to cover today on our blog. Let’s get started!
What’s changed in the UK holiday laws?
Several changes have been made to the rules around UK holiday entitlement. We’ll look at each one in turn and examine what changes businesses may need to make to stay on the right side of the new regulations.
While the regulations came into effect on January 1st, they are intended to be implemented for leave years starting April 1st, which most companies use as the start of their leave year.
How holiday is accrued
The first of these changes concerns statutory leave requirements and the way in which employees accrue holiday.
Almost all employees, including agency workers, seasonal workers, and those with irregular hours are still entitled to a minimum of 5.6 weeks of holiday.
This is equivalent to 28 days a year for people working 5 days a week, the “standard” work week. But it also applies to those that don’t work a standard 5-day week.
For instance, if an employee works 4 days a week, they will be entitled to at least 22.4 days of holiday, since 4 x 5.6 is 22.4.
This formula accounts for circumstances such as compressed hours as long as the holiday days are converted into hours for the employee to use. For instance, someone who works four 10-hour days a week will only receive 22.4 days a year, while someone working five 8-hours days would get the full 28 days.
But when converted to hours, we see that 22.4 days when the days are ten hours amounts to 224 hours, and 28 eight-hour days is also 224 hours.
You can also calculate this from hours directly, giving a simpler approach for those with irregular working patterns. The gov.uk website gives us this statement:
“For leave years starting on or after 1 April 2024, people who work irregular hours or for part of the year will build up (‘accrue’) leave differently. This means their entitlement will be 12.07% of the hours they work in a pay period, up to a maximum of 5.6 weeks.”
Accruing 12.07% of your hours worked as leave provides the same result.
Tracking the actual hours your employees work with a smart scheduling and time clock solution like Findmyshift makes it far easier to quickly carry out these calculations.
Carrying over unused leave
New rules have been introduced about carrying over leave as well. This refers to adding holiday accrued in one leave year to the next year’s allowance. The new regulations allow employees to carry on leave under certain conditions:
Not having reasonable opportunity to use all of their leave.
Being unable to use their annual leave because of taking other kinds of time off, like sick leave or parental leave.
They were unaware they had remaining holiday and that they’d lose it if it wasn’t taken.
What’s changed with rolled-up holiday pay?
Rolled-up holiday pay is a controversial subject, and one we’ve covered previously on this blog. You’re welcome to read our original article on rolled-up holiday pay to find out the previous lay of the land.
A 2006 European ruling made it illegal, but these new changes have reversed that, offering guidance on some situations where UK employers will once again be allowed to offer rolled-up holiday pay.
Offering this type of wage for seasonal or irregular-hours workers will be allowed from April 1st 2024, provided that their holiday pay is set at 12.07% of their standard hourly rate, is added at the end of the period in which the work was completed, and is detailed separately on their payslip.
If all of these conditions are met, employees may choose to opt for rolled-up holiday pay (which offers financial incentives for individuals who don’t want to take a lot of time off) but cannot be forced to do so.
If your business has a mix of employees who do or don’t want to choose rolled-up holiday pay, it’s simple to create alternate pay rates in Findmyshift to track these and ensure they’re paid according to the new laws.
We hope this article helps your business to navigate the new laws with ease for a happy and prosperous 2024.