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Employment Law

Legal guidance - compliance - software

12 JUN 2015

Holiday pay - have you read the latest guidance?

Joanne Oliver
Associate, Veale Wasbrough Vizards

Following a number of recent court judgments, the Advisory, Conciliation and Arbitration Service (ACAS) has published new guidance on calculating holiday pay. Among other things, the guidance highlights the following points.

  • Guaranteed and normal non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay entitlement, but there is currently no definitive case law that suggests voluntary overtime needs to be taken into account.
  • Commission should be factored into statutory holiday pay calculations.
  • Work-related travel may need to be factored into statutory holiday pay calculations.
  • A worker's entitlement to holiday pay will continue to accrue during sick leave.
  • There are different rules for calculating holiday pay depending on the working patterns involved.
  • Workers must take their statutory paid annual leave allowance and can only be 'paid in lieu' for this when their employment ends.
In addition, the guidance confirms the introduction of a two-year limit for claiming backdated deductions from wages, including holiday pay. This is expected to apply to any claim presented on or after 1 July 2015.

Best practice

Whilst the guidance does not say anything new, it is a useful summary for the current obligations in relation to holiday pay.
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