From April 2020 there will be a raft of changes to the requirements of employee Statements of Terms & Conditions and to the way in which you calculate holiday pay. Over the coming weeks I will post further information in order that you can be ready for the changes which come in a piece of legislation snappily titled Employment Rights (Employment Particulars & Paid Annual Leave)(Amendment) Regulations 2018.
At the moment holiday pay is calculated as the average of pay over the 12 weeks preceding the first day of annual leave; that 12 weeks is known as the reference period. Regular overtime, commission and bonuses should be included in that calculation. Non performance related bonuses, reimbursement of expenses and infrequent overtime does not need to be included in your calculation. However, I do sound a note of caution as to what does or does not represent “infrequent” overtime, a phrase that is always open to challenge.
From April 2020 the reference period will be extended from 12 weeks to 52 weeks so you will need to keep a careful record of pay and particularly if you pay overtime on a fairly regular basis.
Need further information? Contact B&D Roper Ltd on 07766 167160 or through our website www.bdroper-hr.co.uk.