News broke on 8th November regarding the long-awaited results of HMRC’s consultation on holiday pay and entitlement for employed workers.
In 2011, in order to come in line with the Working Time Directive, HMRC deemed that the 12.07% accrual method for calculating holiday pay was unlawful. This led to several employee tribunal cases with the employee’s outcome being favoured due to employers not following the amended regulations for calculating holiday entitlement/pay.
Post Brexit, with a view to simplifying holiday accrual calculations, HMRC launched a consultation period. HMRC findings are as follows:
- The government will not proceed with the introduction of a 52-week holiday entitlement period and instead will calculate entitlement as 12.07% of hours worked in a pay period for any irregular hours/part year workers.
- The 2 existing rates of holiday pay will be maintained (Regulation 13 and Regulations 13A) and not combined therefore the following will still be applicable.
- 4 Weeks at normal rate of pay
- 1.6 Weeks at basic rate of pay
- Rolled up holiday pay, which had been deemed as unlawful, is to be re-introduced for those employees working irregular hours or for part time workers.
No implementation date has been announced as many of the changes will require legislative intervention. We will bring you the updates as soon as they are made available.
Disclaimer - All information in this post was correct at time of writing.