Do you employ part-time workers? Here’s how their holiday entitlement calculation system will change

From April, all workers on zero hours contracts (part-time or irregular hours staff), will encounter changes to how their holiday entitlement is calculated.

This means you, as their employer, will need to know the ins and outs of the changes before they come into effect.

The Working Time Regulations 1998 has been modified which means how your employees’ holiday entitlement is calculated has also changed.

So, what should you know to ensure you are compliant with the new legislation?

If I employ part-time workers, what do I need to do?

If you employ staff who work part-time and/or irregular hours, you must now work out what holiday they are entitled to using the new system.

Here’s what you need to do:

Confirm your zero hours employees fall within the set definition of irregular hours/part-time workers

Irregular hours workers have paid hours, that are set out in their contract, and these vary in each pay period.

Part-time workers are only contractually required to work for part of the year – for the remainder of the year, they do not receive work or pay.

Confirming where your employees’ hours fall will help you to adapt to the changes efficiently.

Confirm when your employees’ holiday year runs from and to

The changes will come into effect from 1 April, and these will apply to all holiday years starting on or after this date.

You need to understand that if you have a holiday year that runs April to March then these changes will immediately apply.

However, if you have a different holiday year (such as a calendar year which is January to December) then the changes will not apply until January 2025.

What happens once I have confirmed who will be affected and when?

Once you have confirmed the above, you will need to change your employment contracts.

It is important to know that although the law has changed, consultation is still needed for contractual changes whilst the agreement of the affected employees needs to be sought and gained.

Here are the changes you need to make:

Make sure your workers accrue holiday based on 12.07 per cent of the hours worked in the pay period – this applies to holiday years starting on or after 1 April
Choose between one of two methods that will pay holiday pay to irregular hours and-time workers

Holiday is booked as normal and paid when it’s taken
Holiday is ‘rolled’ up and paid in each pay packet so no pay is received during leave.

If you use the second method, that pay must increase by at least 12.07 per cent per pay period and your employees must take leave.

To remain compliant with new legislation set out by the Government, you will need review your holiday provisions – you can do this by using our expert advice.

For more information about the changes to the calculation of holiday entitlement for part-time employees, contact us today.