Pay and Wages
Holiday pay and entitlements – Monday 1 January 2024
The Employment Rights (Amendment, Revocation and Transitional Provisions) Regulations 2023 comes into force on Monday 1 January 2024 and will impact most employers.
These regulations will effectively bring back rolled-up holiday pay, where employers are given an enhancement on every payslip to cover their holiday pay entitlements. This is an alternative to workers only receiving holiday pay over periods of annual leave. This is currently an unlawful practice, but it will be reintroduced by the regulations to irregular hours and part-year workers only.
As well as rolled-up holiday pay returning for irregular and part-year workers, the 12.07% accrual method of calculating holiday pay entitlement will also return.
This is where holidays accrue at a rate of 12.07% of the hours worked in each pay period. Their entitlement will remain in proportion to the number of hours they work but is subject to a maximum of 28 days per year. This means that part-year and irregular-hours workers will accrue their holiday as they work, rather than being provided with their entire holiday entitlement at the beginning of the holiday year.
Holiday pay and entitlements – Monday 1 January 2024
The Employment Rights (Amendment, Revocation and Transitional Provisions) Regulations 2023 comes into force on Monday 1 January 2024 and will impact most employers.
These regulations will effectively bring back rolled-up holiday pay, where employers are given an enhancement on every pay slip to cover their holiday pay entitlements. This is an alternative to workers only receiving holiday pay over periods of annual leave. This is currently an unlawful practice, but it will be reintroduced by the regulations to irregular hours and part-year workers only.
As well as rolled-up holiday pay returning for irregular and part-year workers, the 12.07% accrual method of calculating holiday pay entitlement will also return.
This is where holidays accrue at a rate of 12.07% of the hours worked in each pay period. Their entitlement will remain in proportion to the number of hours they work but is subject to a maximum of 28 days per year. This means that part-year and irregular-hours workers will accrue their holiday as they work, rather than being provided with their entire holiday entitlement at the beginning of the holiday year.
You will need to review your contracts of employment with these types of workers to see whether you have pre-existing clauses which entitle workers to their entire holiday entitlement at the start of the holiday year.
If you do, you must honour this and continue providing holiday entitlements in this way. If this is the case, you may wish to amend your contracts to reflect this new method. Finally, if your contracts are silent on the matter, you will have the discretion to decide whether workers are entitled to book more holiday than they have accrued so far within that holiday year.
Whilst the regulations come into force on Monday 1 January 2024, these provisions will not be immediately effective as they come into force on leave years beginning Monday 1 April 2024. So, up until this date, you must not calculate holiday pay and entitlement in this way.
Get more information about these regulations and the changes they will implement.
Whilst the regulations come into force on Monday 1 January 2024, these provisions will not be immediately effective as they come into force on leave years beginning Monday 1 April 2024. So, up until this date, you must not calculate holiday pay and entitlement in this way.
Get more information about these regulations and the changes they will implement.
National Minimum Wage and National Living Wage increases – Monday 1 April 2024
From Monday 1 April 2024, the age of those who qualify for the National Minimum Wage is being lowered from 23 to 21, with the hourly rate increasing by 9.8% to £11.44. There are also increases to the National Minimum Wage for workers under the age of 21, as well as apprentices.
This table details the increases:
It’s important to review your rates of pay before Monday 1 April 2024 to ensure that all staff will be earning at least the above amounts. This will help you remain compliant and avoid National Minimum Wage claims being brought against you.