The Law on Holiday Pay and Casual Workers

Employers are of course aware of the requirement to pay its workforce a certain amount of paid leave every year. But what about casual workers, are they also entitled to paid holiday leave? Let’s take a look.

Every worker is entitled to 5.6 weeks of paid annual holiday and accrued holiday pay on termination, calculated from the first day of their employment contract.

When you have workers on a 5-day, 40-hour working week, it is straightforward to calculate their entitlement to 28 days of paid holiday per year. For other regular shift patterns, it is simply a case of multiplying the number of working days each week by 5.6 to discover the yearly entitlement. However, when it comes to workers with irregular working patterns such as casual workers or those on zero hours contracts, it gets a little trickier to make the calculation. But these people are still entitled to statutory leave, so it is important to know how to work out their entitlement.

Casual worker calculations

The most straightforward way of working out holiday entitlement for casual workers is to award them accrued entitlement. In other words, they get to earn holiday entitlement based on the number of hours they have actually worked.

You will need to ensure your employees accrue the minimum of 5.6 weeks of paid leave. To do this, there is a rule you can apply. This is the ‘rule of 12.07 per cent’. This means that for each hour an employee works, 12.07 per cent of it, i.e. 7.242 minutes, is paid holiday entitlement.

So for example, workers who complete three 8-hour shifts every week for four weeks will accrue 11.5872 hours of holiday entitlement. This means they can book almost one and a half shifts off work, and still be entitled to get paid.

For businesses operating outside of regular hours, for example those that open on bank holidays, these can be included in the standard holiday allowance. So whilst there is a reduction in the number of days employees are able to book as paid leave, it does mean they get paid for bank holidays.

To improve morale and staff retention, some employers increase the amount of paid leave they offer their workers. For example, some employers will offer both the standard 28 days of paid leave, or the equivalent for casual workers, plus bank holidays.

If you are uncertain about how much leave to pay your casual workers for, or any workers for that matter, your bookkeepers will be able to help you make the calculations.

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