19 Nov 2018
All employees have a right to paid holiday (statutory annual leave) regardless of the contract type. This includes:
- And zero-hours contracts
The following piece will look at a range of employee entitlements relating to statutory leave. While this is the minimum, you can give an employee more than this. But it's at your discretion whether you choose to do so
How much paid holiday are full-time employees entitled to?
The annual statutory employee holiday entitlement in the UK is 5.6 weeks. This figure is the same for all employees hired in the UK.
The 5.6 weeks' legal minimum holiday usually consists of:
- 20 days = 4 weeks
- + 8 days (which can be the year's bank holidays) = 1.6 weeks
Minimum statutory holiday entitlement can never be changed for UK employees by their employees, only through government legislation. Contractual ones can change but should never drop below the statutory minimum.
How is leave accrued?
The number of days will depend on the hours per week or days that you work, as well as any contractual agreement regarding annual leave.
An employee will build up ('accrue') holiday from the day they start working, including when they’re on:
- Sick leave
- Maternity, paternity, adoption or shared parental leave
UK statutory holiday entitlement law
The Working Time Regulations (1998) implements the EU’s Working Time Directive with a few changes.
For example, although the EU’s Working Time Directive allows for up to four weeks paid time off, the Working Time Regulations allow for 5.6 weeks of paid time off.
These regulations were in place to ensure the health and mental wellbeing of employees.
As part of the initiative, it’s your responsibility to ensure staff take their minimum statutory leave.
How to work out holiday entitlement?
The Croner site now has a statutory holiday entitlement calculator for employers, this includes a bank holiday entitlement for part-time workers calculator.
The calculator accounts for:
- The type of statutory holiday
- The number of days or hours worked
- Employment duration (full year or starting/finishing part way).
You should also follow the same process to work out the holiday entitlement for part-time workers. So use the holiday entitlement calculator for the UK here.
How to calculate holiday entitlement pay
The holiday pay entitlement for employees is a week's pay for each week leaves they take. You can calculate a week's pay according to how many hours the employee works and how they’re paid for the hours.
- Fixed pay for fixed hours (full-time and part-time workers), a week’s holiday pay will be equal to how much they’d normally get for a week’s work.
- Fixed hours worked over variable shifts (full-time and part-time workers), a week’s holiday pay will be equal to the average number of weekly fixed hours worked in the previous 52 weeks at their average hourly rate.
- No fixed hours (zero-hour contract), a week’s holiday pay is the average pay they got over the previous 52 weeks.
Statutory holiday entitlement for part-time workers
Your staff may ask, “How do I work out my holiday entitlement for part-time hours?” Working part-time still entitles employees to statutory leave.
This is in proportion to the hours the part-time employee works ('pro-rata'). You can work this out by the number of days they work a week x 5.6.
For example, if an employee works three days a week, their part-time holiday entitlement will be 16.8 days off a year (i.e. 3 days x 5.6).
Many people have contractual entitlements that are much better than the statutory minimum. The average GB full-time staff member gets 25 days of annual leave plus 8 bank holidays.
Are self-employed workers entitled to any days of holiday?
The only circumstance where an individual isn’t entitled to paid annual leave is if they are self-employed.
Some employers might try to avoid paying for annual leave by suggesting that a member of staff is self-employed. Employees should check their contract to be certain of their employment status.
Bank holiday entitlement
As an employer, you have the option to include UK bank holidays as part of your statutory holiday entitlement. But this is not a requirement.
Most employers include bank holidays or public holidays as part of the annual UK holiday entitlement, although it’s not a legal requirement to do so.
If you close your business for the bank holiday, you have the option of deducting the bank holiday days from the total statutory holiday allowance for the year.
In this situation, you must inform your staff (usually in the holiday policy of the employment contract) that this rule applies to their holiday entitlement.
When did the statutory holiday entitlement change to 28 days?
Previously, employees had around 4 weeks of minimum holiday entitlement in the UK. Since October 2007, a worker has had a statutory right to take a minimum of 4.8 weeks’ paid annual leave (24 days).
On 1 April 2009, this entitlement increased to a minimum of 5.6 weeks for a full-time worker (28 days). You may include bank and public holidays in the 28 days.
Giving holiday notice
Although your employees can apply for time off whenever they want, they should give appropriate notice.
The duration might differ, but generally, employees should apply for the time off with up to double the amount of time they’d like to take off.
For example, if an employee wants to take two days off work, they should apply four days before the time requested.
During busy periods, you can refuse or change holidays to suit the business. Staff members should be sure to refer to their employment contract as holiday and bank holiday rules will be set out by the company.
You must give notice which is at least the same length as the holiday. For example, if the holiday is for one week, you have to give notice one week in advance.
And you can also make employees take their leave at certain times, like Christmas or bank holidays.
How to work out holiday entitlement when leaving a job
You can work out the payment due using the simple formula (A x B) - C, where:
- A is the total holiday entitlement for the year
- B is the fraction of the year to the date of leaving
- C is the amount of holiday already taken
For example, a part-time worker works three days per week. Like all workers, they are entitled to 5.6 weeks' paid annual leave.
They leave a job 7 months into the leave year, having taken eight days off. This is the equivalent of 2.66 weeks (8 ÷ 3).
Applying the formula above: 5.6 x (7 ÷ 12) – 2.66 = 0.61 weeks' leave to be paid in lieu.
If you pay an employee on a daily basis, you can also work out their outstanding holiday entitlement in days.
For example, a staff member working five days per week is entitled to 5.6 weeks per year, the equivalent of 28 days (5.6 x 5).
They leave a job 3 months into the year, having taken four days off.
Applying the formula above: 28 x (3 ÷ 12) – 4 = 3 days' leave to be paid in lieu.
Note that, if you need to, you should round these figures up to prevent underpayment.
Leave entitlement when starting a new job
If one of your employees starts a job part-way through the year, they’re still entitled to annual leave. It requires no minimum period of continuous service to qualify for holiday entitlement.
However, they’re only entitled to part of their total annual leave for the current leave year. What they get depends on how much of the year is left.
So, if the holiday year runs from January to December and someone starts in July, they'll only get half of the annual holiday entitlement for the remainder of the year.
Holiday entitlement disputes
A dispute may occur when an employee feels that you aren’t meeting your obligations. For example, if your employee thinks that their right to leave and pay were not met. There are a few ways to handle these types of disputes.
The first step to resolving a dispute is for your employee to bring it up informally with their direct line manager. If you can't resolve this issue, the next step would be for them to submit a formal grievance complaint in writing.
The grievance procedure involves
- Receiving the grievance
- Holding a meeting
- Investigating the grievance
- Informing the employee of the outcome
- Giving the employee the opportunity to appeal.
Depending on the company, the procedures might differ, but they must all include a meeting with the employee and an appeal process if needed.
You can refer to the Acas holiday entitlement guideline for more help handling grievances at work.
Coronavirus and leave
Employees may be able to the next 2 years if they can’t take it because their work is affected by coronavirus. It's the first four weeks of leave they carry can carry over, provided it was not 'reasonably practical’ for them to take the leave due to the coronavirus.
They could do this if, for example:
- They need to provide cover for their co-workers and have no other opportunity to take a holiday in their leave year
- There will be staff shortages if too many workers take their leave before the end of the leave year
- They’re classed as critical workers, such as healthcare or supermarket workers
Contact Croner today for more information on holiday entitlement and employment law 0145 585 8132
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