Great News Announced Today Regarding Proposed Changes to Holiday Pay

calendar with holiday written on it

The Government is proposing to introduce an accrual method to calculate entitlement at 12.07% of hours worked in a pay period for irregular-hour workers and part-year workers in the first year of employment and beyond.

Regular-hours workers, who know their hours, will continue to accrue annual leave in their first year of employment as they do now.

In addition, employers may be permitted to calculate holiday pay for irregular-hours workers and part-year workers using the old method of ‘Rolled Up Holiday Pay’ (RHP) which had previously been deemed as unlawful.

Workers will not be able to request that they receive RHP, it will be the employer’s choice and if used they will be required to calculate a worker’s holiday pay as 12.07% of the worker’s total earnings within a pay period. The employer will be required to pay the worker with each payslip, rather than when the leave is taken and the Government expects employers to clearly mark RHP payments as separate items on each payslip.

These proposals will affect companies whose new holiday year entitlement starts from 1st April 2024 onwards and GLX will be following the progress of these proposals.

You can read more about the proposed changes on the link below and for further information please don’t hesitate to get in contact with the payroll team at GLX to discuss how these changes may affect you and your business.