Holiday Pay Myths & Facts

Do you fully understand your employees holiday entitlement and pay ?

What annual leave are employees entitled to ?

All employees are entitled to a statutory minimum of 5.6 weeks annual leave

20 days annual leave plus 8 statutory bank holidays, however if the contracts states 5.6 weeks and does not specify that the 5.6 weeks includes bank holidays the employee is legally entitles to 5.6 weeks plus an additional 8 days for bank holiday. 

When do employees start accruing holiday entitlement ?

 Employees start to accrue statutory holiday entitlement from day 1 of their employment.

Can I just pay zero hours / variable contracted employees a percentage of their normal wage to cover holidays ?

Yes following recent changes in legislation you can now pay variable and zero hours workers  percentage of an employee’s wages to cover holiday pay. currently 12.07%

Can I tell employees when to take their holidays ?

Yes all employers have a right to dictate when an employee can take their holidays as long as the give the legally required notice periods.

Can I pay my employees who have not taken all their yearly holiday entitlement ?

No you are not allowed to payment in lieu of untaken statutory holiday unless it is on termination of employment.

Can I allow employees to take holiday forward to the next holiday year ?

In general employees are not allowed under current legislation to carry forward statutory leave into the next following year unless:

• The leave could not be take due to long term sickness.
• The leave could not be taken due to due to a period of maternity, adoption or parental leave . 

If an employee is off sick can they still accrue holiday entitlement ?

Yes employees continue to accrue statutory holiday entitlement whilst off sick, if this entitlement cannot be taken in the year its is accrued due to sickness it may be carried forward to the next holiday year.

If I dismiss an employee or an employee leaves, do I have to pay any outstanding holiday entitlement?

Again the answer is yes upon termination of employment for any reason any untaken holiday must be paid to the employee in their final termination payment.

Do employees lose their holiday if they are off sick during their holiday ?

No an employee may request for the time off to be taken as sick leave allowing them to use the holiday at a later date.

Can I write off any holiday an employee has failed to take at the end of the holiday year?

Yes as already indicated statutory annual leave cannot be carried forward to the next leave year period unless due to sickness or statutory leave as to do so would break current employment law. However, employers may face a claim at a tribunal for doing so if they have not followed the correct procedure.