5.2 C
Manchester
Monday, February 16, 2026
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

Evostock.com: Red Flags in CFD Trading 

In this article, Evostock.com reviews the dangers of CFD trading scams and emphasizes the importance of caution.  Contracts for Difference (CFDs) are a popular trading...

Morson Group Strengthens Energy Supply Chain Through Acquisition of GPG and Aurora

The Morson Group has completed two major acquisitions designed to enhance its capabilities within the energy infrastructure sector and help address the growing demand...

Ultimate guide to real-time stock trading tools: Why Data Clarity is the New Edge

In the modern financial landscape, the difference between a successful trade and a missed opportunity often comes down to milliseconds and metadata. As we move further...

Which box file should you choose? A4 vs foolscap explained

Buying box files sounds like the kind of task you can do in 30 seconds, until you realise there are four different sizes being...
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

Evostock.com: Red Flags in CFD Trading 

In this article, Evostock.com reviews the dangers of CFD trading scams and emphasizes the importance of caution.  Contracts for Difference (CFDs) are a popular trading...

Which box file should you choose? A4 vs foolscap explained

Buying box files sounds like the kind of task you can do in 30 seconds, until you realise there are four different sizes being...

Morson Group Strengthens Energy Supply Chain Through Acquisition of GPG and Aurora

The Morson Group has completed two major acquisitions designed to enhance its capabilities within the energy infrastructure sector and help address the growing demand...

Ultimate guide to real-time stock trading tools: Why Data Clarity is the New Edge

In the modern financial landscape, the difference between a successful trade and a missed opportunity often comes down to milliseconds and metadata. As we move further...

More News

Evostock.com: Red Flags in CFD Trading 

In this article, Evostock.com reviews the dangers of CFD trading scams and emphasizes the importance of caution.  Contracts for Difference (CFDs) are a popular trading...

Morson Group Strengthens Energy Supply Chain Through Acquisition of GPG and Aurora

The Morson Group has completed two major acquisitions designed to enhance its capabilities within the energy infrastructure sector and help address the growing demand...

Which box file should you choose? A4 vs foolscap explained

Buying box files sounds like the kind of task you can do in 30 seconds, until you realise there are four different sizes being...