Holiday pay historically should be provided when leave is taken, and advance pay added to normal payment (i.e. ‘rolled up pay’ ) was deemed illegal. Now businesses have the option to pay on a rolled up basis. This option is available, subject to these rules:
- for individuals classed as irregular hours or part-year workers – although agency workers could fall into this category this is not automatic, an assessment is required
- the amount of holiday payment should be added to normal pay and not be inclusive
- the payslip must clearly show the amount for holiday pay
- the engagement contract should reflect this arrangement
Leave payments should also be made for periods of sickness and other kinds of statutory leave, so don’t forget!
Not only should regularisation of payment over a period make life easier for recruiters but the rate of pay now allowed at a fixed 12.07% (whether payment is made rolled up or not) provides certainty. Good news for recruiters and candidates alike!
For rapid advice on this or any other employment or recruitment related topic please call Lawspeed on 01273236236.
