When it comes to creating headaches for employers, holiday calculations is a topic that just keeps on giving. With the clocks moving forward to British Summer Time sparking Summer holiday thoughts, and the end of the financial year looming, we thought now is a good time to revisit holiday calculations.
If you are one of the employers who align their holiday year with the fiscal year, then you should note that you’ll have two Easter Bank Holiday Weekends in your holiday year. This year, Easter Sunday is next weekend, meaning the Friday 7th and Monday 10th April will be bank holidays. Next year it falls on March 31st so Good Friday will be in this year’s holiday with Easter Monday in next year’s.
This shouldn’t be too much of an issue as it will balance out again the following year but it might cause a problem if an employee leaves during the year and you have to calculate their final pay. Should you pay them the extra day?
Wording in the employee’s contract of employment might influence how final pay is calculated which is why we always recommend that holiday allowance (for statutory holiday) is described as ‘28 days including public/bank holidays’ as opposed to ‘20 days plus public/bank holidays’.
This not only alleviates the issue caused by Easter moving dates each year, but also ensures that workers in industries such as hospitality, retail and care, who are often contracted to work bank holidays, are still entitled to the equivalent time off in lieu. It also makes calculating part-time workers’ holiday much easier.
For part-time workers, the easiest way to determine holiday allowance is using a pro-rata calculation based on the full time equivalent hours of an employee. For example, a part time worker, or someone who is reducing their hours from 5 days per week to 3 days, simply has their holiday adjusted by 40% or two fifths. So, someone who would normally be entitled to 28 days including bank holidays, would get 16.8 days which we would round up to 17 days.
Part-timers who work for part of the day but for five days per week, are still awarded 28 days holiday. This is because any day they take off as holiday will only be for the hours they would have worked anyway. So, for someone who works 9.00am to 2.00pm Monday to Friday, any days holiday they take will effectively be for those hours; so one day’s holiday is still only 9.00am to 2.00pm.
You can combine the two principles above for an employee who works both partial hours per day and partial days per week.
For an employee who works compressed hours, eg. fulfils their weekly contracted hours in four days instead of five to give them Fridays off perhaps, there is a different approach. Because such an employee is effectively working the hours of 1.25 days per day, then any holiday they take is similarly calculated. Someone in this situation then would be granted 22.4 days holiday per year, bearing in mind they are having Fridays off as well.
Our default approach remains to direct enquiries to the online .Gov holiday calculator when calculating holiday as this should avoid disagreements. However, we are seeing more and more anomalies in employee working patterns and so the .Gov calculator doesn’t always have an option for every scenario. Sometimes it’s still a manual calculation.
And don’t forget that, this year, as last year, there will be an extra public holiday to account for Royal events. Strictly speaking, the wording in your employment contracts determines whether or not you are obliged to give the day off for the King’s coronation. But taking into account the fact probably no-one else in the country will be working in the country on that day, except hospitality venues, care and those directly involved in the event, you’re not really going to be the only employer who insists that your staff come into work, are you?
We’re here to help and support with your holiday calculations and questions. Call us on 01452 331331 or email support@hrchampions.co.uk
