Calculating Holiday Pay from April 2020
I’ve just read Accounting Web’s article with regards to holiday pay changes that are coming into effect in April 2020, and I thought it was important to share, in particular with our recruitment clients so that you can prepare accordingly.
To put it simply, almost all workers are legally entitled to 5.6 weeks paid holiday per year (including bank holidays). The amount you are paid for the holiday you take, depends on the amount of hours you work and how you are paid for those hours. The idea being that what you are paid for your week on holiday should be reflective of what you would have been paid if you had been at work that week.
For most of us that work full-time on fixed hours, if we take a weeks holiday, we know we will receive the same pay at the end of the month regardless. This however, becomes more complex when an employee doesn’t work regular hours and therefore doesn’t receive the same pay week-in week-out. In these circumstances, employers have been looking back at a workers previous 12 paid weeks (holiday reference period) to calculate what that worker should be paid for a weeks leave.
So what’s new?
From 6th April 2020 the reference period for calculating holiday pay for variable hour workers will increase from 12 to 52 weeks. The 52 week reference period will function the same way as the 12 week period, which most-importantly means that the employers must look at the weeks that the employee was actually paid and it must not include weeks where they were not paid, as they did not work.
The change comes in a bid to even out the seasonal variation in pay for many variable hour workers.
Written by Ashlee Bloom
If you want to find out more, click here or email us at info@raffingers.co.uk with any questions.
Holiday Pay Legislation Change
Wednesday 26 February 2020
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