Changes to Annual Leave and Holiday Pay

In April 2024, the landscape of holiday accrual and pay for part-year and irregular-hour workers in the UK will undergo significant changes. This development marks a pivotal shift from the traditional norms governed by Regulation 13 and Regulation 13A of the Working Time Regulations 1998, steering towards a new framework outlined in Regulation 15B. For business owners, adapting to these changes is not just a matter of legal compliance but an opportunity to refine how they manage and support their workforce.

Understanding the Changes

The government has introduced a new system specifically designed for part-year and irregular-hour workers, focusing on how their holiday rights are calculated and paid. This move aims to simplify the holiday entitlement and pay calculations, making them more straightforward and fairer for both employers and employees.

With these changes set to take effect for holiday years commencing on or after 1 April 2024, it's crucial for businesses to start preparing now. The core aspects of the new regulation include a redefined approach to calculating holiday pay and accruing holiday time, moving away from the previous system that many found complicated and at times, unfair to certain types of workers.

Steps for Compliance and Adaptation

1. Identify Affected Workers: The first step is to determine whether you employ part-time or irregular hours workers. These individuals' holiday rights will now be managed differently, making it essential to identify them within your workforce.

2. Consider Rolled-Up Holiday Pay: Decide if you want to implement rolled-up holiday pay for these workers. This method involves incorporating holiday pay into the regular payments workers receive, offering a simplified way to manage holiday pay.

3. Coordinate with Payroll: It's crucial to ensure that your payroll functions are aligned with the new system. This might involve updating software, training staff, and revising payroll processes to accommodate the changes in holiday pay calculation and accrual.

4. Update Policies: Review your current holiday policies to ensure they reflect the new regulations. This includes updating how holiday pay and accrual are calculated and communicated to employees, ensuring transparency and compliance.

5. Revise Employment Terms: Consider whether there's a need to issue revised terms and conditions of employment. These changes might impact contractual agreements with your employees, necessitating clear communication and, possibly, renegotiation of terms.

How Altum HR Can Help

Navigating through these changes can be challenging, but you don't have to do it alone. Altum HR offers award-winning support to businesses, helping you to adapt to the new regulations smoothly and efficiently. Our services include:

- Guidance on Identifying Affected Workers: We can help you understand which of your employees are affected by the new regulations and what that means for your business.

- Assistance with Policy Review and Updates: Our experts can assist in reviewing and updating your holiday policies to ensure they comply with the new rules.

- Support with Payroll Adjustments: We can offer advice and support to ensure your payroll functions are ready to implement the new holiday pay and accrual system.

- Revising Employment Terms: If needed, we can assist in revising terms and conditions of employment to reflect the changes, ensuring legal compliance and maintaining clear communication with your employees.

The changes to holiday accrual and pay for part-year and irregular-hour workers represent a significant shift in how businesses will manage these aspects of employment. By taking proactive steps to understand and implement these changes, you can ensure your business remains compliant, while also supporting your workforce effectively. Altum HR is here to support you through every step of this transition, offering expert guidance and practical solutions to make these changes as seamless as possible for your business. Call our team on 01925 552333 or Whatsapp 07432275612.