Holiday Pay Hazard

Recent changes will impact your company and its payroll arrangements.

U.K. workers have now been given the right to demand that certain payments be included in their holiday pay as of right.

There are some very real implications of this and possibly directly to your business. There is a risk that employees start to claim back-pay in respect of any holiday pay previously that didn’t include the following payments elements:

  • payments for the guaranteed overtime that an employee regularly works;
  • payments for overtime that the employee is sometimes required to work but which isn’t guaranteed;
  • payments for travel allowance and/or radius allowance;
  • (possibly) payments for bonus and commission regularly received;
  • (possibly) voluntary overtime payments in very limited circumstances.

Regardless, going forward holiday pay will need to be worked out with this in mind, which is not straightforward. There will most likely need to be a review of payroll arrangements to facilitate this.

We do have some suggestions on how to deal with the situation. If you’re concerned, please do call:

Andrew Humphrey on: 020 7079 2434

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