Should I include the above for all of an employee’s holidays throughout the year? You only need to use this guidance for the first 20 days of annual leave, in line with the EU Working Time Directive. The remaining 11 days (in 2019) or 12 days (in 2020) would be at the employee’s basic rate.
So how is holiday pay calculated? The formula in Fig 2 should be used for calculating holiday pay for the first 20 days of each year. Eligible earnings are the things in the list detailing what should be included in holiday pay calculations.
How do I work out payment for the remaining days? That would be worked out at the basic rate, which is normally what an employee’s contracted rate is.
If a contract of employment states that an employee’s working week is
Fig 2: Calculating holiday pay for first 20 days of each year
Total eligible earnings in the last 12 weeks ÷ 12 = weekly holiday pay for the first 20 days of each year
40 hours, does this affect the calculation of their holiday pay? Anything over 37.5 hours would be classed as overtime so this would affect the calculation. In this case, the 2.5 hours per week would be paid at time-and-a-half.
If I’m only paying someone the basic rate throughout the year, should I use the recommended formula? If your employee does any of the things from the list of eligible earnings then yes, you should use the formula for the first 20 days of their holiday.
If someone is off sick during the 12 weeks prior to their holiday, will this affect the calculation of their holiday pay? We would always advise an employer to use an earlier week for the calculation in this situation.
LEAVING EMPLOYMENT
If someone is leaving, when should they receive their holiday pay? Any outstanding holiday pay should be paid with the final wage.
How do I know how many holidays to pay in a final wage? Do the calculation 31/52 x number of weeks the employee has been in employment (see Fig 1 again), then deduct any days they’ve taken and pay the balance.
HOLIDAY PAY WHEN OFF SICK
Do staff still accrue holiday pay while off certified sick? Yes, employees accrue holiday pay as normal while they’re off sick.
If someone is on long-term sick leave, does their holiday entitlement change? When someone hasn’t been able to use their holidays due to long-term sick leave, they can carry over 20 days of unused holiday. These days must be used within 18 months of the date they’re carried over.
Can an employee take holidays while off sick? Yes, but they must request any holidays in writing. Sick pay would be paused while the employee takes the holiday, then start up again afterwards.
These are just a few of the many different holiday pay situations that can arise. SELECT and the SJIB offer a variety of ways to help Members stay updated on other issues.
i
For further advice about holiday pay, email michelle.
courtney@select.org.uk or call 0131 445 9213.
CABLEtalk OCTOBER/NOVEMBER 2019 53
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