New holiday rules for part year and irregular hours workers

Employers should plan for new rules, which came into force on 1 January 2024

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The new regulations clarify that paying rolled-up holiday pay at 12.07% is lawful for such workers, superseding a recent Supreme Court ruling that stopped the practice.

They also confirm that it is still lawful (despite previous doubts arising from the UK’s departure from the EU) for workers to carry all statutory annual leave to the following year if they are unable to take their leave in a year because they are on family-related leave.

In addition, they clarify that it is lawful for such workers to carry their four weeks per year annual leave forward for up to 18 months if they have been unable to take such leave because of sickness. This also applies where their employer has either not given them the opportunity to take the leave or has not told them that any such leave not taken, and which cannot be carried over, will be lost.

The new rules also define ‘normal remuneration’, which removes any previous doubt that it includes commission, regular overtime, and other payments.

The requirement for employers to keep a record of every hour worked and every rest period is removed.

Employers should check the new regulations and change their policies, procedures and budgets to take them into account. New guidance has been set out to assist in the calculation of holiday entitlement for part time workers.

Additional resources

The Pensions Regulator has also provided the following resources that will help employers/advisers in clients’ auto-enrolment pension duties:

Auto-enrolment duties for staff employed on irregular hours or incomes

Employers’ duties on re-enrolment and re-declaration