NMW rate for holiday pay

Linda32

Hello all,

I wonder if you could help please.


I've recently finished a placement with an employment agency. I finished on 14th October 2011. Today I have received my final payslip with my accrued holiday pay on it.

The rate of pay is at £ 5.95 now I can understand that most of the holiday pay was earned and accrued at the £5.93 rate (before 1st October 2011), I've no idea where the £5.95 rate comes from btw but thats what they have paid at.


I don't surpose for one moment it should have been paid at the new rate of £6.08p should it????

Thank you in advance.

scooby088

I believe the new NMW applies no matter when it was accrued, i'd get onto the agency and ask them to put it right.

Jarndyce

Technically the NMW does not apply to holiday pay, although the rate paid for holidays should reflect the normal rate for the job. This would allow people on a high commission based wage to be lawfully paid below NMW during holidays, for example.

But otherwise if you are on a regular hourly rate, it is this rate which should be paid during holidays.

Whether an employer can justify interpreting 'normal rate' as the average hourly rate across the contract, or whether it has to be the hourly rate in force at the time of payment, I am not sure whether that has been tested legally.

Would be interested in other, informed, views on this point.

Linda32

Jarndyce wrote: »

Technically the NMW does not apply to holiday pay, although the rate paid for holidays should reflect the normal rate for the job. This would allow people on a high commission based wage to be lawfully paid below NMW during holidays, for example.

But otherwise if you are on a regular hourly rate, it is this rate which should be paid during holidays.

Hi, the parts I've highlighted apply to me, no commission work involved so pretty easy on the facts of the matter

I was paid NMW rate from 8th March 2011 to 14th October 2011, every week the same working 42.5 hrs per week.

MrsManda

I think what they may have done is:

You worked for roughly 6 months (March-September) at £5.93 an hour, then 1 month at £6.08 per hour.

If you multiple 6 by £5.93 and then add £6.08 and divide the total by the 7 months worked you get £5.95.

I don't know if that's the right way to calculate it but I think this is how they've calculated the £5.95 per hour holiday accrual.

anamenottaken

Linda32 wrote: »

I've recently finished a placement with an employment agency. I finished on 14th October 2011. Today I have received my final payslip with my accrued holiday pay on it.

It is the pay which has accrued (based on the average for your last 12 weeks of employment - or lesser time if you weren't there 12 weeks). They aren't actually paying for you to have the holiday: they are paying you because you didn't take that holiday.

Orville

Just my view but if you have accured holiday you should be paid at £6.08. If you were still employed today they would have to pay your holiday pay at £6.08 if you were to take it now. I fail to see how they can pay you at the old rate when you haven't actually taken it when that rate was enforced. After all holiday isn't accured on the wage you earnt, it's based on the length of time you have been there.

Linda32

Hi Orville,

Good point, thanks for that, I'll give them a quick polite ring, no harm in that, I shouldn't think.

Andy_L

If you are on an hourly rate you do not have to be paid the NMW for holiday. The NWM & Paid holiday legislation do not integrate well. Effectively an employer can pay you an hourly rate below the NMW figure if, when excluding the holiday hours, it calculates out to the NMW rate

http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_175105