New changes to Annual Leave & Holiday Pay in 2024

The Government has created an entirely new system of holiday accrual and holiday pay for part-year and irregular hour workers as defined in the new regulations.

Key Features for the Annual Leave & Holiday Pay regulations

  • The new rights will be set out in Regulation 15B to 15F of the Working Time Regulations 1998.
  • Taking effect for holiday years commencing on or after 1 April 2024 so for employers with a holiday year running from January this will not take practical effect until 2025.
  • A new holiday accrual method under regulation 15B,  whereby holiday accrues based on 12.07% of the hours worked by the worker in the previous pay period.
  • An option under regulation 16A for employers to use ‘rolled up’ holiday pay (provided that certain conditions are met). This is where holiday pay for regulation 15B holiday can be paid as an additional percentage of pay at the time when the hours worked are paid for, rather than being paid when the annual leave is taken.

Suggested Actions for Employers

  • Work out if you currently engage any part-year or irregular hours workers
  • Decide whether you wish to pay rolled-up holiday pay to any such individuals
  • Undertake all necessary discussions with payroll functions to make sure that your workplace arrangements are ready to administer this new system of accrual and pay
  • Review any holiday policy in place and make all necessary changes to take account of the new arrangements
  • Consider whether you need to issue revised terms and conditions of employment to reflect these changes.

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