Important changes to how holidays pay is calculated regarding overtime

Are your employees regularly required to work overtime?

If so, you may need to change how you calculate their holiday pay.

This could have a profound effect on how your payroll operates and have a financial impact on your business. 

Recently the Employment Appeal Tribunal considered three cases in which employees were required to work overtime if requested by their employers.

The Tribunal decided that:

  • Overtime payments must be taken into account in the calculation of holiday pay if there is a settled pattern of work.
  • If the amount of overtime varies but is regularly paid, overtime payments must also be taken into account on an average basis.

These changes will affect different businesses in different ways.

So, it’s very important you seek advice on exactly what your business needs to do to comply with the new rules and avoid fines and legal action.

We are here to support you.

Give us a call on 0161 476 8276 or email hr@hallidays.co.uk - we are more than happy to sit down with you and discuss how these changes will affect your business.

We will also be sending out more detailed guidance as it becomes available.


Posted 22nd January 2015

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