How much should my holiday pay be? - Paul Doran Law

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How much should my holiday pay be?

How much should my holiday pay beHow much should my holiday pay be?

With the children back at school, the main holiday season might be over. But there are still a lot of questions around holiday pay – especially this year when we’ve had some unexpected extra days off for the Queen’s Platinum Jubilee in May and her state funeral in September.

This article answers those questions, and more.

When are the UK public holidays 2022?

There are usually eight bank holidays a year in England and Wales, nine in Scotland and ten in Northern Ireland. This year has been an exception. We’ll probably have a few extra days off next year too, for the coronation of King George III (date/s to be announced but probably spring/summer 2023).

Here are the dates of the UK bank holidays in 2022:

Seven of these are common to all the UK jurisdictions: New Year’s Day, Good Friday, early May bank holiday, Spring bank holiday, Summer bank holiday, Christmas Day and Boxing Day.

Easter Monday is a bank holiday in England, Wales and Northern Ireland but not Scotland.

The Summer bank holiday varies: in Scotland, it is on the first Monday in August, while in the rest of the UK it’s on the last Monday in August.

In Northern Ireland, St Patrick’s Day and Orangemen’s Day are also bank holidays.

In Scotland, 2 January and St Andrew’s Day are bank holidays.

What’s the difference between a bank holiday and a public holiday, common law or statutory holiday?

A bank holiday is a day when banks and ‘non-essential’ businesses are closed for the day.

Some retail business choose to stay open on bank holidays (however, in England and Wales, there are restrictions around trading on Sundays and Christmas Day, while in Scotland, there are restrictions around trading on on Christmas Day and New Year’s Day).

There is no automatic right for you to take time off or be paid on bank holidays. If you have to work, there is no automatic right for you to get a day off ‘in lieu’. It all depends on what’s written in your employment contract.

A public holiday (or common law / statutory holiday) is a day off which has been arisen through custom and practice, such as Christmas Day.

Obviously essential services, such as hospitals, have to remain open every day.

What does your contract say about statutory holidays?

There is no single legal position. Your own employment contract will usually state whether or not you are entitled to statutory days off.

If your contract says you are entitled to statutory holidays, you’re entitled to take the day off – but if it doesn’t, then you aren’t. The wording will also specify whether you are paid for the day off, or if it is to be deducted from your usual holiday allowance.

Here are some examples:

If your contract reads: “You are entitled to 28 days holiday per year including statutory holidays”, you would be entitled to the day off but it would be deducted from your holiday allowance.

If your contract says: “You are entitled to 28 days’ holiday per annum”, you would not be entitled to the day off unless your employer agrees, and they could choose to deduct it from your holiday allowance.

If your contract says: “You are entitled to 20 days plus statutory days”, this means you would be allowed paid time off on statutory holidays and it wouldn’t come out of your allowance.

Some employers provide more generous holiday options, perhaps 25 days’ holiday plus all the statutory holidays.

If you work for an employer, such as a care home, which needs people working all year round, your contract may have a term expressly stating that statutory holidays are not included.

If you have to work on statutory holidays, your employer may offer to pay you overtime or grant you a day off in lieu. For example, they do this in the civil service.

As we often say, it all depends what’s written in your employment contract.

How much annual holiday are you entitled to?

There’s a lot of variation, but here are some common situations:

If you work full-time…

You are entitled to a minimum of 5.6 weeks per annum which works out at 28 days’ paid holiday each year. Public holidays can be included in that 28 days.

You must take holidays when it is convenient to your employer. You don’t have an automatic right to take holiday on any day you choose.

You may be entitled to more holiday than this, if your contract of employment says so.

If you work part-time or irregular hours…

No matter how many hours you work, you are entitled to a minimum of 28 days’ paid holiday each year, including bank holidays.

If you are sick during your holiday…

In some circumstances, you can claim back any holiday time you lost while you were sick, and maybe even roll it forward into next year’s holiday allowance. You would have to provide evidence to your employer that you were ill while you were on leave, such as a doctor’s note.

How is holiday pay calculated?

Holiday pay calculations can be based on:

If you work full-time…

Your holiday pay will be the same as when you’re at work. For example, if you work 40 hours per week and get paid £400 per week, you’ll get £400 when you take a week’s holiday.

For calculating holiday pay, a week usually starts on a Sunday and ends on a Saturday – unless your pay is calculated on a different day. For example, if your working week ends on a Wednesday, you should treat a week as starting on a Thursday and ending on a Wednesday.

If you work part-time…

Your holiday pay will be adjusted ‘pro rata’, calculated as an average of your most recent 12 weeks of earnings, ignoring any weeks where your earnings were zero.

If you work irregular hours…

If you do casual work on a zero-hours contract or you work shifts that don’t have a fixed pattern, your holiday pay will be based on the average pay you received over the previous 52 weeks.

If there was a week when you got no pay, use an earlier week for calculating holiday.

If there was a week when you received a small amount of pay, for example Statutory Sick Pay, you should use a different week where you received your usual pay.

You should only count back as far as needed to get 52 weeks of usual pay. You can go back as far as 104 weeks, but no further.

If you have not yet been employed for 52 weeks…

Your holiday pay will be calculated based on the full weeks you’ve been employed. For example, if you’ve been with your employer for 26 full weeks, it will be based on the average pay you got during those weeks.

If you are so new to the job that you have not yet accrued any entitlement to paid holiday, your employer might agree to let you take paid time off anyway (so it’s worth asking). For example, you might have just joined the company but already had a holiday pre-booked before you started.

Your employer won’t be able to calculate holiday pay by looking at your average pay from previous weeks. Instead, they should pay you an amount that fairly represents your pay for the agreed time off.

To work out what’s fair, your employer should consider:

If you’re working your notice…

Holiday pay is calculated from the last full week you worked, which can end on or before the first day of your holiday.

You can’t decide to take payment in lieu of holiday unless your employment has terminated. In this case, you are entitled to any accrued but untaken holiday for that year. Your employer may state that your remaining annual leave is to be taken during your notice period (assuming you are working this) or on garden leave.

What about commission, bonuses and overtime?

The law on including commission, bonus and overtime payments in your holiday pay is based on the EU Working Time Directive. This covers four weeks’ holiday only.

So, if you regularly get paid commission, bonus or overtime, your employer must include these payments in at least four weeks of your paid holiday.

Your employer might include these payments in your full 28 days of paid holiday (your statutory annual leave), but they don’t have to.

As with many employment law matters, you’ll have to check your employment contract to see what it says.

Do you think your employer is paying you the wrong amount of holiday pay?

We’ve given lots of information above, to cover as many scenarios as possible. To understand how your own holiday pay is calculated, you’ll need check your employment contract and /or talk to your employer.

If you believe your holiday pay is incorrect, you have three months less one day from the date you received the last incorrect payment to take your claim to an employment tribunal.

We are employment lawyers who act for employees across the UK when their employer treats them wrongly. We can help you negotiate with your employer, and will support you to take your claim to the employment tribunal if necessary.

Related reading

If you need more information about holiday pay, you might like to read our related articles:

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