Government urges employers to tackle ‘alarming’ lack of awareness over holiday pay

The government has launched a campaign to prevent workers being “short-changed” over their holiday pay, as new researchhas revealed an “alarming lack of awareness” about entitlement from both employers and employees.

The Department for Business, Energy and Industrial Strategy (BEIS) has released new guidelines and an online entitlement calculator to make it easier for both employers and workers to calculate holiday pay, but has said the responsibility lies with businesses to ensure pay is correct.

The research has demonstrated that many people not in nine-to-five roles assume they are either not entitled to holiday pay, or are owed less than their actual legal entitlement. The survey questioned 2,000 workers and found that half of those incorrectly thought those on zero-hours contracts were not entitled to holiday pay. In addition, more than half incorrectly thought they had to work for three months before they were entitled to holiday pay.

Legally, every hour worked accrues an entitlement to paid time off, and almost all workers are entitled to 5.6 weeks’ paid holiday per year. This includes zero-hours contracts, agency workers and irregular hours’ contracts.

Employees also have the right not to suffer any detriment for exercising their right to receive their holiday entitlement. 

Paid holidays are worth an additional 12% of normal wagesa week’s extra pay for every two months worked and it is vital that employers take this cost into account when engaging zero hours’ and casual staff. The Government’s campaign on holiday pay entitlement is part of the response to the Taylor review, which includes proposed legislation to extend the holiday pay reference  period. At the moment holiday pay is calculated using the last 12 weeks’ worked but it is proposed to extend this period of calculation to the last 52 weeks.

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