Can I pay staff for untaken annual leave?

grannymay

I set up my own business last year and have 4 staff who work 16, 20, 25, 36 hours per week respectively.

The employee who works 36 hours has used all his leave entitlement (4 weeks plus 8 bank holidays). The three part-time staff accrue hours on a weekly basis eg, annual entitlement of number hours x 4 plus bank holidays if they fall on a day they normally work.

Of the three part-time staff, one has only used 5 hours of her leave entitlement, 1 has used all but 4 hours of her entitlement and 1 has 17 hours entitlement remaining. They have requested that I pay their base rate in lieu of excess hours leave entitlement and I would be happy to do this as they are very dedicated and hard-working staff who have helped me with the setting-up and running of the company.

I have read, however, that the annual leave that doesnt include bank holidays is called 'statutory leave' and can't be carried-over or bought back. Is this a legal requirement or at the discretion of the company owner? Also, is it subject to the usual deductions?

I used a 'standard' Contract of Employment which only states that they are entitled to 4 weeks annual leave per year plus the bank holidays. There isn't anything about payment in lieu or carrying-over leave on it.

First year end coming up so I need to know asap.

Googlewhacker

legally you HAVE to make them have the time.

The point of it being a minimum is to stop employers forcing their staff to not take their holiday.

I'd probably pay them this year personally but mention via a memo to them next year that they MUST take all their holiday and then 9 months in you need to check how they are doing.

jacko909090

Hi

Not an expert by any means but you may find looking at the ACAS website (www. acas . org. uk) useful. (take out the spaces in the address - I am new and can't post direct links!)

The right to annual leave is a legal one but in your case your employees are asking to be paid. Perhaps if you got them to sign an agreement that they wanted to be paid rather than take their leave this would cover you in case they changed their mind later on.

I think ACAS has a helpline - you coudl ring them for some advice.

HTH

Tracey

lucylucky

Staff must have the leave they are entitled to, under the working time regs.

You cannot "buy" it out.

You can include bank holidays in their annual entitlement.

EDIT - they could sign an opt-out of the WTR, but not sure what that entails

Googlewhacker

lucylucky wrote: »

Staff must have the leave they are entitled to, under the working time regs.

You cannot "buy" it out.

You can include bank holidays in their annual entitlement.

EDIT - they could sign an opt-out of the WTR, but not sure what that entails

I don't think WTR does anything to holidays.

anamenottaken

First of all, your full-time (working 5 or more days a week) workers are entitled to 5.6 weeks paid leave each year (= 28 days). You are offering them 20 days plus 8 bank holidays so you are granting them the legal minimum. In the case of your organisation, their statutory entitlement includes bank holidays.

One point regarding having a holiday year which ends on 31 March, which yours appears to do - because of the variable dates on which Easter can fall, there are not always 8 bank holidays in an April to March year. You will need to check that your full-time staff do receive their full 28 days a year.

In connection with the part-timers, your system apparently pro rating the 20 days and then paying for 4 bank holidays IF they fall on dates they normall work is probably incorrect. Part-timers should also receive 5.6 weeks and should not receive less holiday (pro rata) than full-time staff. I think you need to check that they all actually receive 5.6 weeks.

Googlewhacker

anamenottaken wrote: »

In connection with the part-timers, your system apparently pro rating the 20 days and then paying for 4 bank holidays IF they fall on dates they normall work is probably incorrect. Part-timers should also receive 5.6 weeks and should not receive less holiday (pro rata) than full-time staff. I think you need to check that they all actually receive 5.6 weeks.

Good call!

anamenottaken

Googlewhacker wrote: »

I don't think WTR does anything to holidays.

The WTR provide for paid annual leave.

I think it is the WTR opt-out which does not apply to holidays - it is about being willing to work more than an average 48 hours per week.

vikki.f

i know that certain companies allow staff to carry over a certain number of days to the following year up to a maximum of.. i am not sure if this would be allowed and work at least for this year.

lucylucky

Googlewhacker wrote: »

I don't think WTR does anything to holidays.

Why do you think that?

The WTR provides for staff to have a minimum number of days off.

Savvy_Sue

anamenottaken wrote: »

One point regarding having a holiday year which ends on 31 March, which yours appears to do - because of the variable dates on which Easter can fall, there are not always 8 bank holidays in an April to March year. You will need to check that your full-time staff do receive their full 28 days a year.

What you COULD do is change your leave year to run from 1st January each year. It would be a bit fiddly, because you'd need to work out what 3/4 of a leave year looks like for each of them, and then work out what they took up to 31st December last year, carry forward the balance, and then see what was left for the rest of this year. Explain that this is a one-off change, and that they MUST take their full leave entitlement each year.

But it would avoid the Bank Holiday problem in future years.

As an employer, you'd probably want to monitor this carefully because you don't want everyone realising they've still got 3 weeks leave in December and trying to book at the same time.

Actually you can run your holiday year from any date, although if you don't specify one then it would normally start from the date the person started working for you.

In fact, if your business is at all seasonal, you'd probably want to set out when people could and could not book holidays, how many could be on leave at once, and how much notice was required.

anamenottaken wrote: »

In connection with the part-timers, your system apparently pro rating the 20 days and then paying for 4 bank holidays IF they fall on dates they normall work is probably incorrect. Part-timers should also receive 5.6 weeks and should not receive less holiday (pro rata) than full-time staff. I think you need to check that they all actually receive 5.6 weeks.

Yup, absolutely right. If they don't work the same hours each day then it's often easier to calculate it in hours, but the answer should still be 5.6 weeks!