Holiday pay guidance

The government has released new guidance entitled ‘Holiday pay and entitlement reforms from 1 January 2024’. The guidance follows reforms made to the Working Time Regulations to simplify holiday entitlement. The changes came into effect from 1 January 2024. We reported on these changes back in November in our News & insights section of the CEFM website.

Check contracts

The changes include a definition of an irregular hour worker and a part-year worker. This will enable employers to know to which workers the accrual method for entitlement and the introduction of rolled up holiday pay will apply. Working arrangements of individuals will need to be carefully considered when determining the status of a worker. While the guidance focuses on the legal minimum entitlement of 5.6 weeks’ paid holiday, schools generally have contracts with contractual holiday entitlement beyond the statutory minimum. Contracts should be carefully checked to ensure the worker receives the correct amount of leave.

Irregular hours worker

‘A worker is an irregular hours worker, in relation to a leave year, if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable.’

Part-year worker

‘A worker is a part-year worker, in relation to a leave year, if, under the terms of their contract, they are required to work only part of that year and there are periods within that year (during the term of the contract) of at least a week which they are not required to work and for which they are not paid. This includes part-year workers who may have fixed hours, for example, teaching assistants who only work during term time, and who are paid only when working.’

Schools may already be using this formula

From 1 April 2024, the new accrual method for irregular hours workers and part-year workers will be calculated as 12.07% of actual hours worked in a pay period. This figure is based on the statutory minimum holiday entitlement of 5.6 weeks. Schools may already be using this formula.

Government guidance

The document also includes guidance on carryover of leave, calculating leave entitlement when leaving during the leave year and example holiday pay calculations. The link to the government guidance can be found at Holiday pay and entitlement reforms from 1 January 2024.

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