Holiday pay – updated 2024 guidance for irregular and part year workers

Earlier this month, the Department for Business and Trade released new guidance on the holiday pay and entitlement reforms from 1 January 2024.

The guidance goes through changes to the Working Time Regulations and covers the meaning of an irregular hours worker and a part-year worker, holiday entitlement for these workers, carry-over of leave and holiday pay calculations.

The guidance sets out examples as to who would be irregular and part-year workers which is useful. It also explains that part-year workers with fixed hours, for example, teaching assistants who only work during term-time, and who are paid only when working, would count as part-year workers. However, workers with an annualised (flat) salary over 12 months would not count as a part-year worker as there are no weeks where such a worker is not receiving pay.

The guidance covers the accrual of statutory holiday entitlement for irregular hours and part-year workers for leave years beginning on or after 1 April 2024, when holiday entitlement will be calculated as 12.07% of actual hours worked in a pay period.

The guidance does say that for irregular hours and part-year workers, for holiday years starting on or after 1 April 2024, employers can choose to use rolled-up holiday pay. It goes on to say that if employers intend to start using rolled-up holiday pay, they should check their workers’ contracts in case this amounts to a variation of contract. Employers should tell their workers if they intend to start using rolled-up holiday pay and for this payment to be clearly marked as a separate item on each payslip. The holiday pay should be paid at the same time as the worker is paid for the work done in each pay period.

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