{"id":63,"date":"2022-09-01T11:20:26","date_gmt":"2022-09-01T10:20:26","guid":{"rendered":"https:\/\/sense.hr\/blog\/?p=63"},"modified":"2022-09-12T12:44:39","modified_gmt":"2022-09-12T11:44:39","slug":"minimum-holiday-pay-entitlement-regulations-in-the-uk-hows-it-calculated-who-gets-it-and-why","status":"publish","type":"post","link":"https:\/\/senseworkplace.com\/blog\/minimum-holiday-pay-entitlement-regulations-in-the-uk-hows-it-calculated-who-gets-it-and-why\/","title":{"rendered":"Minimum holiday pay entitlement regulations in the UK: How\u2019s it calculated, who gets it, and why?\u00a0"},"content":{"rendered":"\n

\u201cMy wife, two children, and myself have just returned home after enjoying our first \u2018holiday with pay\u2019. We have had a good holiday, feeling for the first time that we could afford to pay for it without having to apologise to the butcher and baker for being unable to meet his bills the week after. I feel I am justified in saying \u2018thank you\u2019 to whoever it was who did the trick\u201d from \u2018Sunburned\u2019, August 1938<\/a>. <\/p>\n\n\n\n

Before that letter was published in the Midland Daily Telegraph, politicians, trade unionists, and ordinary British workers\u2014aka the people \u2018who did the trick\u2019\u2014 had waged a 25-year campaign for every worker, regardless of social status, to receive annual paid leave from their regular employment. And when the first \u2018Holidays with Pay Act\u2019 was passed in 1938, as Mr. Sunburned would confirm, it was a cause for celebration.  <\/p>\n\n\n\n

More than 80 years later, workers still have a right to paid annual leave, although nowadays it\u2019s a little more generous and there\u2019s a lot more to it.  <\/p>\n\n\n\n

Calculations <\/h2>\n\n\n\n

The basic entitlement and calculation are simple. Under the Working Time Regulations 1998<\/a> (WTR) all workers are entitled to 5.6 weeks\u2019 paid annual leave, which is capped at 28 days per year. So, it doesn\u2019t matter whether working patterns are irregular or part time\u2014everyone gets their equivalent of 5.6 weeks per year, up to a maximum of 28 days. An employer can choose to give more but figures should be clearly laid out in employment contracts and holiday pay policies\u2014they can\u2019t give any less.  <\/p>\n\n\n\n

For example, most people will be entitled to 28 days of paid holiday per year, based on a 5-day working week. For someone, who works 3 days a week the calculation would be 3 \u00d7 5.6, <\/strong>giving them 16.8 days of paid holiday per year. The calculation can be applied to hours worked too. So, if an employee has worked an average of 21 hours every week over the previous 52 weeks, the calculation would be 21 \u00d7 5.6 for a total of 117.6 hours leave per year.  <\/p>\n\n\n\n

The exact calculations vary<\/a> depending on actual time worked, which can be different for everyone. The best calculation guide can be found on the ACAS website<\/a> or there is a handy online calculator<\/a> if you prefer to keep things simple. But here\u2019s a quick reference table: <\/p>\n\n\n\n

Working pattern<\/strong> <\/td>Calculation<\/strong> <\/strong> <\/td><\/tr>
Fixed hours <\/td>Based on the worker\u2019s pay for a week  <\/td><\/tr>
Shift work with fixed hours <\/td>Based on the average number of weekly fixed hours the worker has worked in the previous 52 weeks, at their average hourly rate  <\/td><\/tr>
No fixed hours <\/td>Based on the worker\u2019s average weekly pay over the previous 52 weeks (only counting weeks in which they were paid)  <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

OK, so we can easily calculate holiday pay. But what about bank holidays? Or casual and zero hour workers? Can it be carried over to the next year? What if a worker starts part way through the year, or does overtime, or leaves and still has unpaid holiday to take\u2026 for that matter, what\u2019s a worker?  <\/p>\n\n\n\n

All great questions.  <\/p>\n\n\n\n

Stick around, and you\u2019ll be your HR department\u2019s Holiday guru by the end of this article.  <\/p>\n\n\n\n

Are bank holidays included? <\/h2>\n\n\n\n

Apart from Christmas Day and Good Friday, it\u2019s best to think of bank holidays as just that\u2014holidays for banks. For everyone else, that means that bank holidays can be excluded from or included in the 5.6-week allowance depending on the terms of the employment contract. But many contracts do require holiday to be taken on the bank holiday.  <\/p>\n\n\n\n

Can it be carried forward? <\/h2>\n\n\n\n

In general, holiday pay shouldn\u2019t be carried forward and employers should actively encourage workers to take all their allowance before the year end. <\/p>\n\n\n\n

In the days of Mr. Sunburned, paid leave was a bonus that workers could choose to enjoy. Nowadays, paid leave is treated as a health and safety issue, which means it\u2019s there to protect workers from the dangers or overworking<\/a>. Carrying holiday pay into the following year means the health and safety obligations for the current year aren\u2019t being met.  <\/p>\n\n\n\n

But\u2026 there\u2019s always a \u2018but\u2019.  <\/p>\n\n\n\n

The 5.6 weeks of statutory holiday is made up of two different types of paid leave. The first, which is concerned with health and safety, makes up 4 weeks of the total 5.6-week allowance (or 20 days for anyone working a 5-day week). Known as the Working Time Directive requirement\u2014or more commonly \u2018Euro leave\u2019, for its roots in EU law\u2014it must be taken in the year that it\u2019s accrued.  <\/p>\n\n\n\n

The remaining 1.6 weeks (or 8 days for those on a 5-day week) represents the number of annual bank holidays in the UK. Because this aspect of the holiday allowance isn\u2019t concerned with health and safety issues, it can be rolled into the following year if both the employer and the worker agree.  <\/p>\n\n\n\n

The only other exception to this, is if employers have mischaracterised<\/a> the relationship between the employer and the worker as self-employment. If an employer fails to meet their paid leave obligations on that basis, then the worker can claim all their unpaid leave for the entire length of the contract, even previous years. <\/p>\n\n\n\n

So, what\u2019s a worker? <\/h2>\n\n\n\n

Good question. No 100% clear answer. But we\u2019ll try. <\/p>\n\n\n\n

There are lots and lots of cases going through the Employment Tribunal system where \u2018self-employed\u2019 workers are asserting that they are in fact workers. This is largely based on a Supreme Court decision<\/a> that Uber drivers\u2014formally classed as self-employed and still considered to be self-employed for tax purposes\u2014are, in fact, workers. That means that they\u2019re entitled to holiday pay, national minimum wage, and other benefits. <\/p>\n\n\n\n

As the Uber website<\/a> now states: <\/p>\n\n\n\n

\u201cA worker is an employment classification that is unique under UK employment law. Workers are not employees. Workers are entitled to the National Living Wage, holiday pay and access to a pension. You will continue to have total flexibility, meaning you can choose if, when and where you work, while accessing new rights and protections.\u201d<\/em> <\/p>\n\n\n\n

While the UK government says that a worker is anyone who: <\/p>\n\n\n\n