Holiday pay reforms

The UK government has rolled out some changes in 2024 to the Working Time Regulations. These are designed to make it easier to calculate the holiday time and pay of people who don’t have a regular work schedule or only work part of the year.

In this brief post, we’ve  highlighted the key points of the reforms, most of which came into force on 1st April 2024.

The changes are outlined in further detail in our guide on Holiday rights and pay.  Other related sources of information are given below.

What counts as an irregular hours or part-year worker?

The reforms include clear definitions of workers who are affected by these new updates. Basically:

• If your work hours change a lot from one pay period to another, you’re considered a worker with irregular hours.
• If you’re only hired to work for part of the year and have unpaid breaks that last at least a week, you’re seen as a part-year worker. For example, someone like a teaching assistant who works during the school term but not during the school holidays.

Changes in calculating holiday pay

If you work the whole year round, whether full-time or part-time (but excluding the self-employed), the way your holiday pay is calculated stays the same as it was previously. That’s a minimum of: 5.6 weeks of paid leave per year, with 4 weeks paid at what you usually earn and the rest at a basic pay rate.

If you work irregular hours or only part of the year, and with effect from the leave year beginning 1st April 2024, there’s a new way to calculate your holiday pay. It’s based on 12.07% of the hours you work in each pay period. There’s a government holiday calculator online to help you and your employer work this out.

Holidays for irregular/part year workers on maternity or sick leave

Also starting with the leave year from 1st April 2024, there’s a change in the way to work out how much holiday you’ve accumulated, if you’re on maternity leave, family-related leave, or sick leave and if you also normally work irregular hours or just part of the year.

It’s too detailed and lengthy to try to summarise in a short post like this, but if you want to find out more, Section 3.3 of the government’s guide to the reforms ‘Holiday pay and Entitlement Reforms from 1st January 2024’ explains it clearly and in plain English.

Rolled-up holiday pay

From 1st April 2024, what’s called “rolled-up holiday pay” is also permitted, although only for people with irregular work schedules or who only work part of the year.

This approach adds holiday pay into your normal pay packets, which is quite different from the old way of looking back at the last 52 weeks of pay to figure out your holiday pay.

These employment law updates are all about making things simpler and making sure everyone gets a fair deal on holiday pay and time off. If you’d like more information about any aspect of these latest updates, take a look at the government’s comprehensive guide mentioned above.

For legal support to resolve problems relating to holiday pay – or any other employment law issue – get in touch with our expert employment law team at Monaco Solicitors. Or visit our website to explore all the helpful information and advice it contains about employment law issues