Holiday Pay Reforms

Written By Antonia Proctor

You may recall that back in January 2024, it was announced that the way we manage holiday pay would be changing. We’re going to see the true effects of these changes in the coming months, with January-December pay periods restarting this month and April-March pay periods coming to a close very soon. Here’s a summary of some of these changes:

Holiday Carry-Over

It is now a legal right for employees to have unused leave carried over to the next pay period, if any of the following apply:

  • The employee wasn’t given an opportunity to take all of their leave or weren’t encouraged to do so.

  • The employer didn’t inform staff that any unused holiday days would be lost.

  • The right to holiday pay or payment isn’t recognised.

Statutory Holiday Entitlement

The 5.6 weeks of statutory holiday entitlement are broken down into 4 weeks at “normal pay”, and 1.6 weeks at basic pay.

Normal Pay: Normal pay includes commission payments, overtime payment, pay relating to seniority and experience.

Changes That Impact Irregular and Part-Year Workers

Holiday is pro-rata for irregular and part-year workers, accrued on the end of each pay period. This is 12.07% of the hours worked in each period.

  • For leave years that started before 1st April 2024, there are no changes to how leave is calculated. Irregular and part year workers will still be entitled to 5.6 weeks of annual leave, and will be paid it when leave is taken

  • For leave years after 1st April 2024, employers can either pay rolled-up holiday pay or accrue holiday entitlement as a bank of leave.

Antonia Proctor
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