Holiday pay - overtime

[VickyA]

Hello. I'm trying to work out how much holiday I need to pay employees who work regular overtime. They work 40 hours per week and then any hours after this are paid at time and a half. Should I be adding the overtime worked into their holiday entitlement or does the fact that their overtime rate is higher than their normal hourly pay mean that this is not necessary? Any advice most appreciated!

 

[Newchodge]

Hello. I'm trying to work out how much holiday I need to pay employees who work regular overtime. They work 40 hours per week and then any hours after this are paid at time and a half. Should I be adding the overtime worked into their holiday entitlement or does the fact that their overtime rate is higher than their normal hourly pay mean that this is not necessary? Any advice most appreciated!

You need to separate holiday entitlement (time) from holiday pay (money). All Staff are entitled to a minimum of 5.6 weeks holiday (including bank holidays). This is minimum is based on a 5 day week so subject to a maximum of 28 days. In hours they are entitled to 40*5.6. Whenever they take a day off for which they are paid (for example on a bank holiday) they have used1 day's entitlement.

Holiday pay for somone whose pay is not the same every pay period (week or month) must be calculated by taking the average of a week's pay over the last 52 worked weeks prior to the week in which the first day of holiday is taken. This means the rate of holiday pay will vary each time a separate period of holiday is taken. 'Worked weeks' means you ignore weeks in which no pay for work was made, so weeks of statutory sick pay or weeks without work are ignored. In order to get 52 worked weeks average you may have to go back up to 104 weeks. If someone has not worked 52 weeks you average the weeks they have worked. If the average week is less than the basic week, you should pay the basic week.

It is all set out here. https://www.gov.uk/government/publi...ay-pay-for-workers-without-fixed-hours-or-pay and here https://www.gov.uk/holiday-entitlement-rights/holiday-pay-the-basics.

Please do not shoot me, I am explaining the law, I didn't write it.