Employment Legislation

How Have the Holiday Pay Calculations Changed?

Legislation

How Have the Holiday Pay Calculations Changed?

Due Date

6 April 2020

Summary

When you calculate holiday pay for workers without fixed hours or pay, the current reference period is 12 weeks. From April 2020, the government is increasing the holiday pay reference period to 52 weeks.

The only exception to this is during a worker’s first year of employment. For example, if an employee had been employed for 30 weeks at the time of their leave, the previous 30 weeks would be used to calculate their holiday pay.

The primary reason for the change is inconsistent payment of holiday pay. This is often due to fluctuations in pay because of seasonal variations. Leave following a busy period could be paid at a higher rate than leave following a quieter period. The new change should even out these peaks and troughs.

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