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

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

Calculating the ROI of Your Projects with Time Tracking

Before initiating a project, professional services firms want to know how much profit and revenue they can generate for the company. Return on Investment (ROI) analysis helps firms to evaluate…Read More

Humanizing the Time Tracking Tool

Benjamin Franklin once said, ‘Time is money’ and nowhere is truer than in business. Time is a strategic asset that is extremely limited. Businesses that use their limited time productively…Read More

How Time Tracking Improves Bottom Line Results

Every enterprise is looking for ways to improve its bottom line and gain profit in a given time. From hiring the right talent to training their existing employees, organizations spend…Read More

Demystifying the millennial workforce: 5 tips from Trunk Club’s Andrew Anderson Devine

Time magazine labels the millennial generation the “most threatening and exciting generation,” infamous for “narcissism [and] its effect: entitlement.” In the workplace, the perception of the millennial workforce is no…Read More

Time and Attendance Orientation Guide

In a growing business, the day will eventually come when managing time and attendance on paper becomes both inefficient and risky, especially when trying to balance things like overtime, paid…Read More

Using shared services? These five technologies are a must

As organizations continue to scrutinize operating costs and look for areas to drive efficiencies, shared services centers (SSCs) are a no-brainer. The concept of a multi-function SSC has been around…Read More
  • Polaris
  • Time & Project Insights
  • Time & Projects Solutions
  • Replicon Products
  • Replicon Users
  • Cloud
  • Corporate
  • Professional Services Management
  • Shared Services Management
  • Time and Attendance Management
  • Customer Feature
  • Time Intelligence
  • Industry News
  • Global Compliance Updates
  • Others