BusinessRolled-up holiday pay: What it means for employers

Rolled-up holiday pay: What it means for employers

New regulations unveiled this week could lead to an average £1,000 increase in the annual earnings of temporary and contract workers.

Under the new rules, individuals with irregular or zero working hours, or those employed seasonally, will now be permitted to receive ‘rolled-up’ holiday pay.

This method involves incorporating holiday pay into their standard wages rather than providing a separate payment during their time off. Consequently, workers will receive a slightly higher hourly rate, and businesses will no longer need to calculate holiday entitlement separately.

The current prohibition on rolled-up holiday pay stems from a 2006 European Court ruling expressing concerns that workers might be disincentivised to take leave, as they could earn more by continuing to work.

While the government initially proposed extending rolled-up holiday pay to all workers, it has decided against it, deeming it less advantageous for those with regular hours.

New year regulations

These regulations, effective from January 1, 2024, mark a significant shift in holiday laws that will impact numerous employers. The changes also introduce a new method for calculating holiday entitlement.

The swift implementation follows the government’s release of two sets of proposals earlier this year aimed at reforming holiday rights. The government has now responded and provided draft regulations.

Key features of the new Employment Rights Regulations 2023

  1. Retaining two distinct ‘pots’ of annual leave with different pay rates (4 weeks at the normal rate of pay and 1.6 weeks at the basic rate of pay).
  2. Introducing rolled-up holiday pay for irregular hour workers and part-year workers, encompassing certain agency workers.
  3. Plans to legislate an accrual method, calculating entitlement at 12.07% of hours worked in a pay period for irregular hour workers and part-year workers from the first year of employment onward.
  4. Simplifying Transfer of Undertakings (Protection of Employment) regulations and reducing administrative burdens for small businesses.

Tania Bowers, the global public policy director at The Association of Professional Staffing Companies (APSCo), expressed satisfaction with the inclusion of rolled-up holiday pay in the regulations, emphasising its necessity for protecting agency and umbrella workers.

She urged recruiters and umbrella companies to communicate the importance of workers taking their owed holiday or pay in accordance with the Working Time Regulations.

Helen Greaney
Helen Greaney
I'm a journalist with more than 18 years' experience on local, regional and national newspapers, as well as PR and digital marketing. Crime and the courts is my specialist area but I'm also keen to hear your stories concerning Manchester and the greater North West region.
Latest

PR Fire Streamlined UK and US Press Release Distribution for Global Media Reach

Businesses looking to gain attention from journalists in both the UK and the United States often struggle to find a single platform that effectively...

Why Creative Judgment Now Matters More Than AI Access

WANDSWORTH, London. June 10th, 2026 - BearJam is highlighting how storytelling ability, aesthetic judgment, and human direction are becoming the key factors that separate...

Brighton Residents Increasingly Opt for Expert TV Wall Mounting as Home Entertainment Expands

As modern televisions continue to grow in size and become a focal design feature in living rooms, many homeowners in Brighton are now relying...

MotorDesk Rolls Out Latest Platform Enhancements for Independent Dealers

MotorDesk has launched its most recent set of platform improvements for May 2026, aimed at helping independent motor dealers work more efficiently. The update...
Subscribe to our newsletter
Business Manchester will use the information you provide on this form to be in touch with you and to provide updates and marketing.
Don't miss

Manchester charity helping people with rare genetic condition to receive key donation

A total of £1,548 has been raised to support a vital health charity in Greater Manchester. Worsley-based charity Cure Usher Syndrome will receive the contribution...

Brighton Residents Increasingly Opt for Expert TV Wall Mounting as Home Entertainment Expands

As modern televisions continue to grow in size and become a focal design feature in living rooms, many homeowners in Brighton are now relying...

Trusted Birmingham Engineers Maintain Strong Demand for TV Aerial Installation Services Across the West Midlands

Residents and businesses in Birmingham are still relying on Aerial & Satellite Express for professional TV aerial and satellite installation services, delivered by a...

Awaab Comply Appoints Housing Expert Danny Bird to Drive Awareness of Awaab’s Law

Awaab Comply, the specialist compliance and property safety platform supporting housing providers in meeting the requirements of Awaab's Law, has announced the appointment of...

More News

PR Fire Streamlined UK and US Press Release Distribution for Global Media Reach

Businesses looking to gain attention from journalists in both the UK and the United States often struggle to find a single platform that effectively...

Why UK entrepreneurs fly to Europe and back in a day

For a growing number of UK entrepreneurs, Europe is becoming a day trip. Founders are increasingly flying out in the morning, holding meetings in...

How video production Manchester can help your business stand out

In a crowded marketplace, getting noticed by potential customers can be a challenge. Businesses need marketing that captures attention, communicates value, and creates a...