The first week into the new year has seen the Government release new guidance that explains the latest holiday pay and entitlement changes.  It deals with the reforms made to the Working Time Regulations 1998, which the Government introduced on 1 January 2024, which intends to simplify holiday entitlement and holiday pay calculations. It affects:

  • irregular hours workers and part-year workers;

  • accrual of COVID-19 carryover of leave;

  • rates of holiday pay and annual leave;

  • rolled-up holiday pay.

The changes include:

  • defining irregular hours workers and part-year workers in relation to the introduction of the holiday entitlement accrual method and rolled-up holiday pay;

  • introducing a method to calculate statutory holiday entitlement for irregular hours and part-year workers;

  • introducing a method to work out how much leave an irregular hour or part-year worker has accrued when they take maternity or family related leave or are off sick;

  • removing the Working Time (Coronavirus) (Amendment) Regulations 2020 which affect the accrual of COVID-19 carryover of leave;

  • maintaining the current rates of holiday pay where 4 weeks is paid at normal rate of pay and 1.6 weeks paid at basic rate of pay, whilst retaining the 2 distinct pots of leave;

  • defining what is considered ‘normal remuneration’ in relation to the 4 weeks of statutory annual leave;

  • introducing rolled-up holiday pay as an alternative method to calculate holiday pay for irregular hours workers and part-year workers.

The Government guidance can be viewed here.

If you require any advice on holiday entitlement as an employee or an employer, please get in touch with our employment law team today. We’ll be happy to advise on employment rights as well as the drafting or amending of employment contracts. Contact us today on 0845 287 0939 or complete our online contact form and a member of the team will get in touch with you.