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Be aware of holiday entitlement for employees

The sun has been out in all its glory recently and people are once again getting that holiday feeling as the dark days of lockdown appear to be behind us.

With all remaining Covid travel restrictions dropped across the UK from March 14 and as Easter approaches, employers should be aware of what holiday their staff are legally entitled to.

It’s quite a complex area, so to avoid falling foul of the law, businesses should seek expert legal advice on this matter.

By law, most full-time workers are entitled to 5.6 weeks’ paid holiday (‘statutory annual leave’) a year or pro-rata for part-time.

This applies if staff are:

Full time
Part-time
Under a zero-hours contract

The 5.6 weeks is usually made up of:

20 days = four weeks
Eight days (which can be the year’s bank holidays) = 1.6 weeks.

Entitlement might include bank holidays, or the employer may offer more and it should be part of the contract of employment.

How does entitlement build?

An employee starts to build or accrue holiday from their start date and the employer should tell them the dates of their statutory leave year as soon as they start working.

The leave year and holiday entitlement are not affected by maternity, paternity or adoption leave. The employee still builds up (‘accrues’) holiday over these periods.

How the accrual system works

Under the accrual system, a worker builds up one-twelfth of their leave each month.

Example: Someone works a 5-day week and is entitled to 28 days’ annual leave a year. After six months in the job, they’d be entitled to 14 days’ leave (half of their total leave, or 28 ÷ 12 × 6 months).

Parental or sick leave

Staff can carry over some or all untaken leave into the next leave year. An employer must allow a worker to carry over a maximum of 20 of their 28 days’ leave entitlement if the worker could not take annual leave because they were off sick.

Holiday pay

If working hours do not vary (part-time or full time) holiday pay will be calculated using the usual pay rate.

For example, if pay for 37 hours every week is £400, it should be the same for the holiday week.

For those with no fixed or regular hours, pay will be based on the average over the previous 52 weeks.

Planning ahead for holiday absence

Planning holiday cover can be a nightmare for businesses, so it’s a good idea for staff to ask for holiday dates as far in advance as possible.

It should be at least twice the amount of time beforehand as the amount of time off unless your employment contract says otherwise.

As a business you can:

Refuse holiday at certain times, for example during busy periods, but cannot refuse to allow any holiday at all
Make staff take holiday at certain times, such as Christmas or bank holidays
Say how much holiday they can take at one time

Sickness and holiday

Workers can still build up (accrue) holiday while on sick leave.

For help and advice on matters relating to employment law, contact our expert team today.