Holiday Pay Ruling in UK Will Make Time Off Calculations Critical For Employers

Holiday pay ruling in UK will make time off calculations critical for employers

In December 2014, the Employment Appeal Tribunal (EAT) made a significant ruling on how holiday pay should be calculated for employees who work overtime. The ruling came out of the dispute between Bear Scotland v. Fulton, in which the plaintiffs contended that their non-guaranteed overtime should be included in their holiday pay. While employees must accept overtime work if offered, employers are not obliged to offer it (which differs from voluntary overtime where employees aren’t contractually obliged to accept if/when their employer offers it). The impact on employers is that this ruling will form part of the Wages Regulation from 1 July 2015.

Already, employers are liable to pay employees non-guaranteed overtime, should an employee put in a claim. However a saving grace for employers is that claims for underpayment of holiday can only be made within three months of the most recent underpayment. An employee will not be eligible to make a claim if there is a break of three months or more between periods of underpayment.

What does this mean for you?

If you haven’t yet, it means you may need to review how you track overtime and employee time off. Until the EAT ruling, only basic pay was taken into account to compute holiday pay. Now employers must take “non-guaranteed overtime” into account, as well as other allowances that may be included in an employee’s normal compensation.

While the ruling may be challenged in court and modifications made to the judgement, your organisation may still be liable to pay overtime claims. Therefore effective time and attendance tracking has become even more important now for employers wishing to avoid pay disputes.

Co-author: Pamela Oldfield

Avatar
ABOUT THE AUTHOR
Replicon
Replicon provides award-winning products that make it easy to manage your workforce. With complete solution sets for client billing, project costing, and time and attendance management, Replicon enables the capture, administration, and optimization of your most underutilized and important asset: time.
Get started today.
Set up a free trial based on your business needs. Start Free Trial

Global Compliance Desk – Ireland

New Unpaid Parental Leave Entitlement The Parental Leave Acts allow parents to take parental leave from employment in respect of certain children. Under the Parental Leave Act 1998, parents of…Read More

Global Compliance Desk – Germany

Annual Leave Entitlement During Unpaid Special Leave  An employee who is continuously on unpaid special leave for a calendar year is not entitled to holiday leave in the absence of…Read More

25 Employee Payroll Tips for Small Business Owners

Recruiter | July 05, 2019 By Lakshmi Raj, Co-Founder and Co-CEO, Replicon Payroll can be a challenging task for any small business but with the right tools, it can become…Read More

6 steps for fast-tracking profitability in your consulting practice

Advice aimed at entrepreneurs and small businesses tends to be heavily product-oriented, but in reality the majority of US small businesses fall under the “Professional, Scientific, Technical, and Other Services”…Read More

Consulting firms: 4 ways to improve billing & get paid on time

At the end of the day, your consulting firm relies on the assumption that a good percentage of clients will honor their payments promptly and accurately. In the professional services…Read More

5 ways to improve service delivery in your organization

In a highly competitive market, service-based businesses need to capitalize on any opportunity to set themselves apart from their (often very similar) competitors. While implementation, system details, and service management…Read More
  • Cloud
  • In The News
  • Corporate
  • Professional Services Management
  • Project and Program Management
  • Shared Services Management
  • Time and Attendance Management
  • Workforce Management
  • Customer Feature
  • Feature Update
  • Time Intelligence
  • Industry News
  • Webinar Recap
  • Global Compliance Updates
  • Chat with us
    How can we help you?