Government issues guidance on holiday entitlement changes for part-year and irregular-hours workers
In light of the recent amendments to the Working Time Regulations, the Government has issued guidance intended to help employers tackle holiday calculations.
New regulations
On 1 January 2024, the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 came into force (Employment Rights Regulations). The Employment Rights Regulations introduce significant and extensive changes to the Working Time Regulations including:
- New definitions of 'part-year' and 'irregular hours' workers
- A pro-rata mechanism to allow holiday entitlement to accrue for part-year and irregular hours workers at the rate of 12.07% of worked hours (this is intended to reverse the impact of the Brazel judgment)
- The ability to pay rolled-up holiday pay for part-year and irregular hours workers
These changes will take effect for leave years starting on or after 1 April 2024.
Guidance
The Government has now issued guidance to accompany the Employment Rights Regulations. The guidance is non-statutory and provides examples of how to carry out calculations under the amended Working Time Regulations. The guidance explains:
- How to interpret the definitions of 'irregular hours worker' and 'part-year worker' under the New Regulations
- How statutory holiday will accrue for irregular hours and part-year workers
- How to calculate holiday entitlement where a worker leaves a job part-way through a leave year
- How to calculate holiday entitlement for workers whose weekly hours are fixed but whose daily hours vary
- How to deal with the accrual of statutory holiday during family-related leave or sick leave
- When workers are entitled to carry leave forward into the next leave year
- How to calculate holiday pay taking account of regular payments such as bonuses, commission and overtime