Huge holiday pay boost for a million workers from next week – can you save £1,000s?

OVER one million workers will get a huge holiday pay boost within days.

From Monday, April 1, temporary workers may see their pay increase due to the government’s decision to legalise rolled-up holiday pay for irregular-hours workers.

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By rolling up holiday pay, these workers can receive holiday pay included in their wages instead of needing to request it as and when they take a holiday.

The old method of requesting holiday pay often results in temporary workers losing thousands of pounds every year. 

Qdos, an insurance provider for flexible workers, has hailed the move as a welcome development.

It extends the same paid holiday entitlement as full-time, permanent employees to temporary workers.

This change means irregular-hours workers – whose work hours are “wholly or mostly variable” each pay period, are much more likely to receive this legal entitlement. 

Currently, this is not always the case, as there have been instances of employment agencies and umbrella companies withholding workers’ holiday pay. 

Seb Maley, chief executive of Qdos, said: “Making rolled-up holiday pay lawful is excellent news– an important development for well over a million people operating via employment agencies and umbrella companies. 

“In the past, you would have got your holiday pay when taking leave, but it’s been far too easy for non-compliant providers to withhold this – in short, meaning that not everyone receives what’s theirs. 

“Now, you’ll get holiday pay as part of your overall pay packet – extra money, directly in your pocket, that you’re legally entitled to.

“This could boost your income by thousands every year.”

How much holiday am I entitled to?

Almost all people classed as workers are legally entitled to 5.6 weeks of paid holiday a year (known as statutory leave entitlement or annual leave).

This includes:

• Agency workers
• Workers with irregular hours (for example, those on zero-hours contracts)
• Part-year workers (for example, those who work term-time only)

An employer can include bank holidays as part of statutory annual leave.

Most workers who work a five-day week must receive at least 28 days of paid annual leave a year. This is the equivalent of 5.6 weeks of holiday. 

Part-time workers who work regular hours for the whole year are entitled to at least 5.6 weeks of paid holiday, but this will amount to fewer than 28 days. 

For example, if they work three days a week, they must get at least 16.8 days of leave a year (3×5.6).

People working irregular hours or part of the year (like term-time workers) are entitled to up to 5.6 weeks statutory leave.

For leave years starting on or after 1 April 2024, people who work irregular hours or for part of the year will build up leave differently.

This means their entitlement will be 12.07% of the hours they work in a pay period, up to a maximum of 5.6 weeks.

Visit www.gov.uk/calculate-your-holiday-entitlement to use the government’s holiday entitlement calculator to get an estimate for your annual leave allowance.

How much holiday pay am I entitled to?

Workers are entitled to a week’s pay for each week of statutory leave that they take.

A week’s pay is worked out according to the kind of hours someone works and how they’re paid for the hours.

This includes full-time, part-time, term-time and casual workers.

For zero-hour workers a week’s party is calculated by looking at the worker’s average pay from the previous 52 weeks (only counting the weeks in which they were paid).

If a worker has less than 52 weeks of pay, then the average pay rate for the full weeks they have worked is used.

How do I book time off and request pay?

The general notice period for taking leave is at least twice as long as the amount of leave a worker wants to take, plus one day.

For example, a worker would give three day’s notice for one day’s leave.

An employer can refuse a leave request or cancel leave, but they must give as much notice as the amount of leave requested, plus one day.

For example, an employer would give 11 day’s notice if the worker asked for 10 day’s leave.

Although employers can refuse to give leave at a certain time, they cannot refuse to let workers take the leave at all.

At the moment those on zero-hour contracts will need to agree with their line manager when they can take leave.

Once this is done, you will need to request to receive holiday pay from your holiday accrual balance.

However, you will no longer need to do the second part of this process when the new rules outlined above come into force on April 1.

This post first appeared on thesun.co.uk