Holiday Pay Update

Every worker – whether part-time or full – is entitled 24 days if a five day week is worked or pro-rata for those working part-time. This will increase to 28 days (for a five day week) from 1 April 2009.

Basically, you accrue 1 week’s paid holiday for every 10.83 weeks worked. The payroll system calculates 1/10.83 of an average weeks pay and allocates it to your holiday entitlement every week, so that a full weeks average pay every quarter is accrued.

As 1/10.83 is a bit of a 'strange' decimal fraction (0.09233!) the system rounds it up to about 0.095, or 9.5%, of average pay.

For example, if someone works two days in one week and earns, say, £100. Then they work five days the following week and earns £300, the average weeks pay, after the second week, will be £200. At this stage they will have accrued holiday entitlement of around £19 (9.5% of £200).

If they then continue to earn £300 per week for a continuous period of 10.83 weeks the average pay will, of course, be £300 per week and any time off will be calculated at this rate.

If, however, they worked irregular hours or have time off for reasons other than holiday, the value of the average week’s pay (for holiday purposes) will vary from week to week but still be an average of your last 10.83 weeks.

If a worker’s employment ends, he or she has a right to be paid for the leave time due and not taken. Temporary work necessarily means that assignments may finish before one year and often before 10.83 weeks and therefore a method of calculating holiday entitlement 'pro-rata' must be used.
Please note that the above figures are approximate.

However, please contact us if you need any further explanation.

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New maternity and paternity benefits ‘delayed until 2010’

The government has rocked employers and staff alike by delaying its plans to extend maternity and paternity pay and leave until April 2010. Under the planned changes, maternity and adoption pay will go up from 39 weeks to 52.

The originally planned changes were expected to come to fruition by April 2009. But HM Revenue & Customs has said in a statement that it will now prepare for babies born after April 2010.

Employee relations adviser at the CIPD (Chartered Institute of Personnel and Development), Mike Emmott, said that this latest move shouldn’t be seen as a change in policy but more a victim of the current economic climate.

He added: “The timing may be to do with the threat of recession and the government is probably getting the sense that any shift in legislation is going to be seen as an unnecessary threat to hard-pressed employers. It will happen, probably sometime in 2010.”

However, the statement added: “This should not be taken to imply any timing decisions have been taken. It is simply a pragmatic approach.” The government has said the increased entitlements would have been enforced before the end of its current term. The latest that Prime Minister Gordon Brown can call a general election is June 2010.

Under the planned changes, maternity and adoption pay will go up from 39 weeks to 52. Additional paternity leave and pay will be introduced so that fathers would get the right to take up to 26 weeks’ paid time off to care for a child if the mother returns to work and has not used her full entitlement to paid maternity leave.

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