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

Why Buying a Global Time Tracking Solution Can Benefit Large Services Organizations

Deciding between buying or building has always been a tremendous challenge and the debate still continues in boardrooms across the globe. However, the rise of remote and hybrid forms of…Read More

Global Compliance Desk – New York

New York - Paid Sick Leave Law  Under this blog, we had previously discussed in detail the New York State Paid Sick Leave law (“NYSPSL”) which went into effect on…Read More

5 Ways to Stop Resource Management Inefficiencies

Overruns and delays routinely plague projects, but new, off-the-shelf, integrated project and resource management solutions offer avenues out of traditional bottlenecks. As operation-intensive service businesses apply pandemic lessons to adapt…Read More

Will AI replace consultants?

The onset of AI and smart machines automating formerly-human jobs has been discussed at length as of late -- often in relation to manufacturing and manual labor jobs. And yet,…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
  • Polaris
  • Time & Project Insights
  • Time & Projects Solutions
  • Replicon Products
  • Replicon Users
  • Enterprise Time Tracking
  • Cloud
  • Corporate
  • Professional Services Management
  • Shared Services Management
  • Time and Attendance Management
  • Customer Feature
  • Time Intelligence
  • Industry News
  • Global Compliance Updates
  • Others