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Changes to Holiday Pay


There are some important changes to holiday pay which are to come into force with effect from 1 January 2024. The key points are:


  • The principle established by the Supreme Court in 2022 that part year workers, including some casual and zero hours workers, should receive a full year of holiday entitlement is reversed so that holiday pay can once again be calculated based on the days and hours worked.

  • Rolled-up holiday pay is now lawful, which again reverses earlier case law. This means that the old method of calculating holiday pay by way of accrual at 12.07% of hours worked can be re-instated for casual workers and other employees who work irregular hours.

  • All statutory annual leave shall be carried forward to the following year when a worker is unable to take their leave due to being on family related leave such as maternity and parental leave;

  • Regulation 13 leave (4 weeks each year) can be carried forward for a maximum of 18 months where a worker is unable to take their annual leave due to long-term sickness; and

  • Holiday pay for Regulation 13 leave must include additional payments such as commission and regular overtime.

Those last three points have been enshrined in case law for some time but will now have statutory effect from 1 January 2024. If you are unclear on any of these points or require guidance please contact us during the course of the next week to discuss.



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