Employers: a half term reminder about holiday pay

As the schools break for half term, it is a good time to remind employers about their obligations in relation to holiday pay.

Last year, the Employment Appeal Tribunal in Bear Scotland & Ors v Fulton & Ors UKEATS/0047/13/BI set out guidelines for when overtime payments should be included in employers’ calculations for holiday pay.  In essence, it was decided that workers who are usually paid commission, a bonus and/or overtime should be paid holiday pay calculated on the basis of an average of their total time worked and not just their basic pay.

Bear in mind that ‘overtime’ for these purposes is defined as that which employers offer (but do not have to guarantee) and which employees have to carry out if it is offered.

Note however, that overtime need only be included in holiday pay calculations for the first four weeks of holiday payments.

For more detail, refer to our other articles on this topic:

• Overtime to count in holiday pay after Employment Appeal Tribunal decision
• the Government ruling (consequent on the Bear Scotland case) to enforce a two-year limit on claims from employees for backdated holiday pay.

For more information and assistance on calculating holiday pay correctly, please contact Susan Mayall on 0161 785 3500 or email susan.mayall@pearsonlegal.co.uk

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