Holiday Pay.

[Tyre Smoke]

My employees are contracted to work 35 hours a week. Overtime is voluntary and paid at the same hourly rate as their basic.

They get 28 days paid leave calculated at 7 hours a day.

I have an employee saying that despite signing and working to the contract as above, he is entitled to average overtime payments on four of his holiday pay.

Is that right?

[T6 vanman]

As an employer ... You should know this .... but

Stolen from Google

In practical terms, and when calculating holiday pay, you should review the previous three months’ employment and take the average amount of overtime paid to be included in any holiday pay.

It is also important to note that such overtime payments only apply to the four-week statutory holiday element of an employees’ holiday pay per year. Any additional holiday does not need to include overtime.

[Jasandjules]

Tyre Smoke said:

I have an employee saying that despite signing and working to the contract as above, he is entitled to average overtime payments on four of his holiday pay.

Is that right?

How much overtime is he doing?

I would suggest you may wish to engage a HR person/outsource HR - I do have one I can recommend but they are rather expensive as generally more for the larger firms.

[Tyre Smoke]

He does on average between ten and fifteen hours a week.

It's not a problem, I just wanted clarification.

[TVR1]

Yes. But I don’t quite understand how, as an employer, you didn’t actually just ‘Google’ it. I’d scrub myself up on this stuff if I were you as you could have a claim for the past 7 years (from any employee, past or present) coming your way.

This has been an ongoing issue since 2012 on what is considered a ‘normal working week’. Thank goodness for Workingtime directives and ECJ.

https://beta.acas.org.uk/checking-holiday-entitlem...

[gizlaroc]

Average wage of last 12 weeks if pay is not always the same.

If any of those weeks have no pay then go back another week or however many are needed.

[Tyre Smoke]

It was only recently I started employing people as opposed to them being self employed.

[TVR1]

Tyre Smoke said:

It was only recently I started employing people as opposed to them being self employed.

Get on it straightaway. I can assure you I did as an employee of Renault Retail Group back when....

Turned out quite differently from things you hear about here in the UK. I wasn’t ‘managed out’ or job threatened, I was sent a letter by the MD of Renault Group France (guess who? C.G no less) thanking me for raising awareness of an issue that could’ve cost them far more financially, than playing silly buggers.

Overnight, ALL sales staff increase in basic by £3500 per year and prorated pay.

[NoNeed]

Tyre Smoke said:

He does on average between ten and fifteen hours a week.

It's not a problem, I just wanted clarification.

How many days?



I ask this because 28 days is the minimum for those working 5 days a week
3 days would be 17 days a year.
https://www.gov.uk/calculate-your-holiday-entitlem...



If two days a week a 28 day entitlement would give 4 months a year off

Edited by NoNeed on Monday 20th May 21:24

[Driver101]

You should be paying him the average of his previous 12 weeks when he is on holiday.

A lot of companies are not doing this yet. It was the same when shift allowances also had to be factored into holiday pay. Companies were slow to do so and ended up having to backdate pay.

[twibs]

How would you go about raising this issue if your thought your employer would then stop your overtime ?
Even though you had done the same regular overtime for the past 12 years without average holiday pay ?

[Tyre Smoke]

Legally I don't think there is anything that stops an employer cutting your overtime.

Morally is a different matter.

[Black_S3]

I used to work night shifts 1 week in every 4 at double time (crazy generous I know) and it was essentially counted as guaranteed overtime but was non pensionable and non bonusable(sp). We had one new starter who suggested in a team meeting that holiday pay should be at an average of 3 months salary - all he got in return was an extremely strange look from our manager and a comment along the lines of ‘anyway, moving on’.

[Driver101]

Black_S3 said:

I used to work night shifts 1 week in every 4 at double time (crazy generous I know) and it was essentially counted as guaranteed overtime but was non pensionable and non bonusable(sp). We had one new starter who suggested in a team meeting that holiday pay should be at an average of 3 months salary - all he got in return was an extremely strange look from our manager and a comment along the lines of ‘anyway, moving on’.

Overtime is usually excluded from pensionable salary and bonus payments.

Holiday pay is different.

[TVR1]

Black_S3 said:

I used to work night shifts 1 week in every 4 at double time (crazy generous I know) and it was essentially counted as guaranteed overtime but was non pensionable and non bonusable(sp). We had one new starter who suggested in a team meeting that holiday pay should be at an average of 3 months salary - all he got in return was an extremely strange look from our manager and a comment along the lines of ‘anyway, moving on’.

Well, depending on when this was, the new starter was almost certainly correct. Regular bonus and overtime payments are now (should be) taken into account when calculating holiday pay. IIRC it’s based on the previous 17 weeks earnings or time employed if less than that.

[Black_S3]

TVR1 said:

Well, depending on when this was, the new starter was almost certainly correct. Regular bonus and overtime payments are now (should be) taken into account when calculating holiday pay. IIRC it’s based on the previous 17 weeks earnings or time employed if less than that.

In my case 2007-2017...

[gizlaroc]

Holiday pay is based on the last 12 or 13 weeks earnings, there is no arguing that as an employer, that is the law.

If you have done 100% over time for the 12 weeks before your holiday you should get that as holiday pay while you are away. A boss can't legally not pay you it.

[Algarve]

Tyre Smoke said:

My employees are contracted to work 35 hours a week. Overtime is voluntary and paid at the same hourly rate as their basic.

They get 28 days paid leave calculated at 7 hours a day.

I have an employee saying that despite signing and working to the contract as above, he is entitled to average overtime payments on four of his holiday pay.

Is that right?

If it wasn't right then you could give people 5 hour contracts and offer them 30-40 hours overtime a week, paid at the same rate. Then effectively opt out of holiday pay at all...