How to deduct holiday entitlement

[Emma S]

Hi,

I have recently opened a cafe and we have employed staff. I have spent a good amount of time reading around employment law on most of the official sites (ACAS, .gov.uk etc) and I am happy with how to calculate holiday entitlement and pay for our staff. What I cannot find any information on is how much annual leave I need to deduct from their allowance when they want a day off. They are on zero hours contracts, which is mutually beneficial for us all - they are happy with the set up as they have varying childcare/caring responsibilities outside of work, and it allows us to move shifts around to match demand during busy and quiet periods, until we have established the best working patterns that suit us and the staff. What that means in practice though is that shift lengths vary between staff and between days. Do I simply take off a full working day's leave (8hrs) each time someone wants a day off? Or should it reflect the average shift length they personally have worked? Depending on which method I use has a huge effect on how many days off they will end up with - it could be as few as six or as many as 10 for one member of staff for example, who tends to work 4 hours on a Monday and Tuesday. And what if they tend to work 4 hours one day but 6 another day? Confused! Help!

 

[Newchodge]

Hi,

I have recently opened a cafe and we have employed staff. I have spent a good amount of time reading around employment law on most of the official sites (ACAS, .gov.uk etc) and I am happy with how to calculate holiday entitlement and pay for our staff. What I cannot find any information on is how much annual leave I need to deduct from their allowance when they want a day off. They are on zero hours contracts, which is mutually beneficial for us all - they are happy with the set up as they have varying childcare/caring responsibilities outside of work, and it allows us to move shifts around to match demand during busy and quiet periods, until we have established the best working patterns that suit us and the staff. What that means in practice though is that shift lengths vary between staff and between days. Do I simply take off a full working day's leave (8hrs) each time someone wants a day off? Or should it reflect the average shift length they personally have worked? Depending on which method I use has a huge effect on how many days off they will end up with - it could be as few as six or as many as 10 for one member of staff for example, who tends to work 4 hours on a Monday and Tuesday. And what if they tend to work 4 hours one day but 6 another day? Confused! Help!

You do it in exactly the same way as you have calculated their entitlement. How have you done that?

 

[Prime81]

when I worked on a bank contract I just got paid my holiday every month on top of my wages. so a day off was already paid if you see what I mean.

 

[Newchodge]

when I worked on a bank contract I just got paid my holiday every month on top of my wages. so a day off was already paid if you see what I mean.

It's called rolled up holiday pay and it has been illegal for a number of years.

 

[Emma S]

You do it in exactly the same way as you have calculated their entitlement. How have you done that?

OK, thanks for the prompt response! So, I calculated her entitlement as a WTE of a full time employee who would be entitled to 28 days. She is 0.22 WTE based on her hours, which works out as 6 days per annum, or 49 hours. So are you saying for a day off I should deduct 0.22 of a full working day? That would be 1.76 hours, which would still give her 28 days off, which considering she only usually works 2 days would be 14 weeks! I'm even more confused!

 

[Newchodge]

She is 0.22 WTE based on her hours,

If she is on zero hours, how do you get that figure? If all your staff are on zero hours, what is a 'full time employee'? I haven't ever seen anywhere that recommends that method!

The simplest way is to multiply the hours she actually has worked by 12.07%. If she wants a day off, agree how many hours that is and deduct that many hours from the 12.07% calculation.

Or if your staff actually work a minimum number of hours every week, they are not on zero hours. Give them a contract for those certain hours (perhaps 5 per week). For 5 hours per week they are entitled to 5.6*5 (28 hours) holiday. Every week they take off they have taken 5 hours paid at the average of a week's pay over the previous 52 weeks.

 

[Emma S]

If she is on zero hours, how do you get that figure? If all your staff are on zero hours, what is a 'full time employee'? I haven't ever seen anywhere that recommends that method!

The simplest way is to multiply the hours she actually has worked by 12.07%. If she wants a day off, agree how many hours that is and deduct that many hours from the 12.07% calculation.

Or if your staff actually work a minimum number of hours every week, they are not on zero hours. Give them a contract for those certain hours (perhaps 5 per week). For 5 hours per week they are entitled to 5.6*5 (28 hours) holiday. Every week they take off they have taken 5 hours paid at the average of a week's pay over the previous 52 weeks.

It is the 'agree how many hours that is part' I am struggling with. I do not want to issue contracts with set minimum hours, and nor do my employees want them. How do we 'agree' how many hours a days holiday is? Is there anything considered standard practice for that, anecdotally or legally?

 

[Newchodge]

It is the 'agree how many hours that is part' I am struggling with. I do not want to issue contracts with set minimum hours, and nor do my employees want them. How do we 'agree' how many hours a days holiday is? Is there anything considered standard practice for that, anecdotally or legally?

As long as you have properly calculated the holiday entitlement in hours, it does not really matter, provided they receive the correct number of hours' paid holiday. Use the average for that day of the week over the last 52 weeks. Or the average hours per day worked for the last 52 weeks.

 

[UKSBD]

As long as you have properly calculated the holiday entitlement in hours, it does not really matter, provided they receive the correct number of hours' paid holiday. Use the average for that day of the week over the last 52 weeks. Or the average hours per day worked for the last 52 weeks.

Slightlly OT.
I know it changed to the average over 52 weeks in April, but was that backdated or does it start from April?

i.e
As we are in October now is it the average from April (when it changed), or is it the full 52 weeks?

 

[Newchodge]

Slightlly OT.
I know it changed to the average over 52 weeks in April, but was that backdated or does it start from April?

i.e
As we are in October now is it the average from April (when it changed), or is it the full 52 weeks?

Any holiday taken after 1 April should be paid at 52 weeks average, counting back from the first day of holiday.

 

[Emma S]

As long as you have properly calculated the holiday entitlement in hours, it does not really matter, provided they receive the correct number of hours' paid holiday. Use the average for that day of the week over the last 52 weeks. Or the average hours per day worked for the last 52 weeks.

OK thanks