What should I know about calculating holidays?
The statutory minimum holiday allowance is 5.6 weeks per holiday year including public holidays. For a full time employee (5 days per week) this breaks down as 20 days annual leave and 8 public holidays.
Businesses may award more than the statutory minimum as an employee benefit, which could help with talent acquisition and recruitment, and in turn improve employee retention.
When is my holiday year?
Your holiday year may be January – December, or for example it may run with your financial year.
What about bank holidays?
How you manage the bank holidays will depend on the employee’s working pattern. For a business who operate M-F, and close on BH then it is usual to allocate the 8 BHs and give the employee the remaining 20-day allowance.
Where a business is operational over weekends/BHs and the employees work shifts, then it is more standard to give the employees the entire 28 days as their allowance but they must book all days including any bank holidays where they are scheduled to work.
What about pro-rated staff?
Allowances are pro-rated for part time workers, according to the hours they work.
E.g., for someone working three days out of five, they are entitled to three fifths of the statutory entitlement.
What about if an employee leaves the business?
Allowances are pro-rated for part year where someone joins or leaves the business. So, if someone joins halfway through the year, they would only be entitled to half of the annual statutory entitlement. This is usually calculated on either a weekly basis, accruing at 0.53 days per week worked (statutory), or monthly accruing at 2.33 days per month worked. It is important to use the same calculation each time to ensure transparency and fairness.
Additionally, if a leaver has not taken all of their pro-rated entitlement by the time they leave the business, they should be paid for this on departure. Any holiday carried over from a previous holiday year, should not be prorated for the part year when someone leaves the business, only the entitlement in the current holiday year.
Equally, if they have taken more than their pro-rated entitlement, then the company is usually within its rights to recoup this from the employee’s final salary payment. Check this is covered in your employment contracts.
If you want to know more about how to manage part time employee’s holiday allowances, there’s a separate video just for this topic!
If you have any queries, please do not hesitate to contact us via the contact form below: