Clarity on holiday accrual during long term sick leave

At the end of last year, the UK Government announced the introduction of new legislation aimed at simplifying what have become complex annual leave and holiday pay rules. The regulations also clarified the situation which many employers face when employees are off on long term sick leave, continuing to accrue holidays.

The ability to carry annual leave remains but from 1 January 2024, workers will be entitled to carry forward four weeks’ leave entitlement if they can’t take it because of sick leave, but this must be used within 18 months of the end of the holiday year in which the entitlement originally arose – even if they remain off sick. 

This change reduces the liability for many employers who have employees on long term sick leave, and who would otherwise have accrued a large entitlement of holiday pay which would require to be paid on termination.

Employees who are off on family-related leave such as maternity or adoption leave will still be able to carry the full 5.6 weeks’ entitlement into the next holiday year if they cannot take it due to family leave.

Long term sickness can be a significant worry for employers. If you are facing a difficult conversation with a long term sick employee, contact 121 HR Solutions on 0800 9995 121 for support. 

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