Change to holiday entitlement in 2018 – Are you prepared ?

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Under the Working Time Regulations 1998, workers are entitled to 5.6 weeks’ paid leave per year. The 5.6-week entitlement under the Regulations equates to 28 days’ leave per year for an employee who works five days per week. The 28 days can include bank holidays, of which there are usually eight per year in England and Wales.

The way in which the Easter bank holidays fall in 2018 and 2019 means that employers that operate an annual leave year of 1 April to 31 March may not be giving workers their full holiday entitlement of 28 days.

In 2018, Good Friday is on 30 March and Easter Monday is on 2 April. In 2019, Good Friday is on 19 April and Easter Monday is on 22 April. This means that there are only seven bank holidays in an annual leave year of 1 April 2018 to 31 March 2019.

Employers that give workers holiday entitlement of “20 days’ holiday plus bank holidays” in contracts of employment will be giving employees only 27 days’ annual leave, which is below their statutory minimum holiday entitlement.

Employers in this position should top up employees’ holiday entitlement for the leave year running 1 April 2018 to 31 March 2019, to ensure that staff retain their 28-day statutory entitlement. Employers cannot pay employees in lieu of their statutory holiday entitlement, except where employment is terminated.

An employer could nominate specified days on which workers must take the extra day’s annual leave. In the absence of a relevant agreement to the contrary, to require an employee to take leave at a particular time, the employer must give the employee advance notice that is at least double the length of the period of annual leave that the employee is to take.

This issue does not affect employers with an annual leave year running from 1 January to 31 December, as there are sufficient bank holidays in this period.

Employers in Scotland and Northern Ireland are unlikely to be affected by this issue, as there are eight Scottish bank holidays and nine Northern Irish bank holidays from 1 April 2018 to 31 March 2019.

Word of Warning

Holiday entitlement under the Working Time Regulations 1998 cannot be replaced by a payment in lieu, except where employment is terminated. This precludes employers from offering employees a payment in place of the annual leave that they lose in an annual leave year of 1 April 2018 to 31 March 2019 if their holiday entitlement is “20 days’ holiday plus bank holidays”.