Changes were made on 1 January 2024, addressing annual leave.The changes primarily affect irregular and part-year workers, defined as:

• Irregular hour workers are those who do not have a set pattern of working – for example those on a zero hour contract.
• Part-year workers have set periods in the year when they do not work – for example those on a term-time only contract.

Some of the changes to annual leave had immediate impact, and some apply to leave years that start on or after 1 April 2024.

Carrying leave forward

The following changes took effect on 1 January 2024:

• An employee can carry forward 8 days of annual leave to the next year if their employer agrees. We would suggest that if you agree roll over that you attach a condition that it must be used by a certain date in the year.

• If someone cannot take their annual leave due to being on family leave (e.g.maternity/adoption/Shared Parental leave) they can carry forward 28 days of leave to the next leave year.

• If an employee is absent due to sickness and therefore unable to take annual leave they can carry forward 20 days into the next leave year as long as it is taken by 18 months from the end of the leave year in which it was accrued.

• If an employer did not allow the employee to take leave, or refused to pay annual leave (therefore dissuading the employee from taking the leave), or failed to tell the employee that untaken leave would be lost, then 4 weeks of leave can be carried forward into the next leave year until 1 year has been elapsed since the leave was taken and paid correctly.

Employees are entitled to a minimum of 5.6 weeks (28 days) of paid annual leave. 4 weeks of the 5.6 week annual holiday entitlement must be paid at ‘normal’ rate of pay (this means taking the average earned over the last 52 weeks worked, including commission, overtime etc). The other 1.6 weeks can be paid at base salary (or can be paid at the same ‘normal’ rate of pay).

The information provided in this document is for general guidance only and should not serve as a replacement for professional advice. Your use and reliance on the information is solely at your own risk, with no warranty given nor implied against error or omission.

Leave entitlement and pay

The following only applies to leave years starting on or after 1 April 2024:

• When calculating the annual leave for irregular hour workers (e.g. those on zero hour contracts) 12.07% of the hours that they have worked should be applied.
• When calculating the annual leave for part-year workers (e.g. term time workers, seasonal workers) the formula of (total holiday entitlement/remaining weeks in the year)*100 should be applied.
• When calculating the holiday pay for irregular hour and part-year workers rolled up holiday pay can be used. This means paying 12.07% of earnings on top of earnings, but not paying anything when the individual takes the leave. If this approach is used the amount used should be ‘normal’ pay – which is base pay plus commission, overtime, shift premia etc., and cannot be ‘basic’ pay. Rolled up holiday pay must be accounted for as a separate item on an itemised pay statement.

Is all of the above covered in your procedures and policies? There has been so much change to rules regarding holiday calculation in the past few years it is difficult to keep up/ If you need any assistance them speak to a member of the team or complete the form here and we will be in touch.