You should be aware that your employer could now make changes to the way you are paid for your holiday pay to ensure that you get all the pay that you have accrued and are entitled to.
Background
The UK Government has responded to consultation on holiday pay that’s been ongoing for some time. This has arisen out of the UK’s withdrawal from the EU, and the Government’s decision to review certain parts of UK employment law as a result of this. From January 2024 the law has changed meaning that employers can now choose to pay workers who work irregular hours (such as agency workers) for their hoilday pay as they accrue it, rather than make them apply and claim for it.
How did the current holiday accrual and claim system work?
Many employers currently operate what is called a holiday accrual and claim system. The employer, e.g. agency, bank or umbrella company, keeps holiday pay aside until the flexible worker wants to take time off. The worker must apply for holiday time off and then claim the holiday pay back personally for this absence, the onus is totally on the worker. The issue with this method is that if you don’t claim your holiday during the year, you may lose your entitlement to it, and the employer keeps these funds.
Some employers have been known to take advantage of this, and not remind employees to claim holiday pay.
What’s going to change?
The biggest change is simplifying holiday pay calculations for workers who work irregular hours so that employers can choose to pay those workers what is called ‘rolled-up’ holiday pay. Rolled up holiday pay means an employer pays workers an additional sum on top of their hourly rate of pay, so that the additional sum is intended to represent their holiday pay, instead of the worker applying for holiday time off and then having to claim the holiday pay to cover this absence.
From April this new approach will reflect an ‘accrue as you go’ type arrangement for irregular hours workers, i.e. they will build up holiday as they work and will be paid for holiday as that holiday accrues. This method is fairer, by taking away the onus on the worker to apply for holiday pay. Workers will now not miss out if not claimed and will reduce the likelihood of some employers benefiting from unclaimed holiday pay.
Altrix have always paid rolled up holiday pay
The great news is Altrix has always paid rolled up holiday pay via your hourly rate through Altrix PAYE and we also pay the amount to your chosen umbrella company. We believe in fairness and transparency and don’t think it’s right to make you chase for any payments you are owed, ensuring that if you are paid via Altrix PAYE all holiday pay, tax and NI is taken care of for you, with no requirement for you to chase or make a claim, so you never lose out.
When will this happen?
This came into force from 1 January 2024 and is applicable for the holiday year starting from 1 April 2024. So, if you work with another agency or umbrella company make sure you are getting your holiday pay included from this date, or claim the back holiday pay that you are entitled to!
