14.1 C
Manchester
Thursday, July 10, 2025
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

Your Help Hub Extends Handyman Services Nationwide Amid Surging UK Demand

Your Help Hub, a fast-growing name in home maintenance and improvement, has launched its handyman services nationwide to better serve the needs of customers...

Reliable auto locksmith services in Manchester: Everything you need to know

Car keys are essential to our daily lives, yet they are more vulnerable than we might think. In the lively city of Manchester, where...

Hillbrush Debuts Tornado Broom Range for Tough Outdoor Cleaning Environments

Hillbrush has launched its innovative Hillbrush Tornado Range — a robust, modular broom system designed to raise the bar for strength, reliability, and outdoor...

Blaugranagram Partners with 101 Great Goals to Deliver Deeper Fan-Focused Football Content

101 Great Goals has officially entered into a strategic content partnership with Blaugranagram, aiming to enrich the football experience for fans by combining their...
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

Hillbrush Debuts Tornado Broom Range for Tough Outdoor Cleaning Environments

Hillbrush has launched its innovative Hillbrush Tornado Range — a robust, modular broom system designed to raise the bar for strength, reliability, and outdoor...

Blaugranagram Partners with 101 Great Goals to Deliver Deeper Fan-Focused Football Content

101 Great Goals has officially entered into a strategic content partnership with Blaugranagram, aiming to enrich the football experience for fans by combining their...

Your Help Hub Extends Handyman Services Nationwide Amid Surging UK Demand

Your Help Hub, a fast-growing name in home maintenance and improvement, has launched its handyman services nationwide to better serve the needs of customers...

Left Behind by the Algorithm: AI Benefits Bosses, But Workers Struggle to Keep Up

• Senior managers are far more likely to use AI than junior staff, new study finds • 73% of leaders use AI each month, compared...

More News

Your Help Hub Extends Handyman Services Nationwide Amid Surging UK Demand

Your Help Hub, a fast-growing name in home maintenance and improvement, has launched its handyman services nationwide to better serve the needs of customers...

Hillbrush Debuts Tornado Broom Range for Tough Outdoor Cleaning Environments

Hillbrush has launched its innovative Hillbrush Tornado Range — a robust, modular broom system designed to raise the bar for strength, reliability, and outdoor...

Blaugranagram Partners with 101 Great Goals to Deliver Deeper Fan-Focused Football Content

101 Great Goals has officially entered into a strategic content partnership with Blaugranagram, aiming to enrich the football experience for fans by combining their...