Holiday pay in wages?

Googlewhacker

Presumably when you deduct the 'holiday pay' you don't end up under NMW?

marybelle01

Deleted%20User wrote: »

Thanks all :A think you've clarified it for me


No I'm not going to be an agency/temp worker as I believed my new job is fixed hrs 37 ¬Ω - going to be one of those mobile Home Care Assistants though the company also does have a care home and has been running nearly 20 years, which is why I found it a little odd as I know these temp/agency have had problems in the past

I thought about it overnight and think what I'll do is open a 'holiday pay bank account'! what a weird way to do things! hope this ain't the first of many surprises, just didn't even think to ask at interview silly me

Massive thanks again

In that case I am afraid that I suspect you will find that it is the first of quite a few surprises. Because no matter what has been said about the law being confusing there is no doubt in my mind that if you are a direct employee on fixed hours then this form of payment for holidays is not legal. So you are either not what you think you are, or...

anamenottaken

Deleted%20User wrote: »

Thanks all :A think you've clarified it for me


No I'm not going to be an agency/temp worker as I believed my new job is fixed hrs 37 ¬Ω - going to be one of those mobile Home Care Assistants though the company also does have a care home and has been running nearly 20 years, which is why I found it a little odd as I know these temp/agency have had problems in the past

I thought about it overnight and think what I'll do is open a 'holiday pay bank account'! what a weird way to do things! hope this ain't the first of many surprises, just didn't even think to ask at interview silly me

Massive thanks again

In that case, your pay should be paid every week (or month), whether or not you take holiday in the period. In that sense your holiday pay is included in the hourly rate - as it is for any salaried job.

getmore4less

If you are full time then ask what the holidays are.

There is no need for rolled up holidays in any form.

If mobile check paid travel time and expences.

Whats the pay rate?

paddedjohn

If you are full time then any sort of rolled up holiday pay is unlawful, you must by law be give a minimum of 5.6 weeks holiday with pay.

Pricivius

Until the government amends the WTR to ensure it no longer refers to set off, then employers will seek to rely on it, alongside the transparency/comprehensive policy and ensuring employees take their holiday.

Until a Tribunal, or more importantly the EAT or above declare this practice unlawful, then I would suggest that this remains a grey area.

The simple fact of the matter is that this is not unusual. Many small companies use this method as it is much easier from an administrative point of view. The other point to bear in mind is that it is very unlikely that employees would ever complain about it:
- they get 5.6 weeks holiday pay (or more if their contract provides for it) guaranteed every year. No losing holiday pay if they don't manage to take all their leave.
- often companies will work it out at higher than 12.07% legally required, again for simplicity. I have seen 12.5% given.

I totally agree that the ECJ have declared it unlawful and it is certainly not without risk for the company, but the current advice being given to companies is that the risk is currently small, for the reasons given above and in my previous post.

As an employee, the difficulty you have is that I doubt they would change their method of payroll for one person. There is no risk for the employee, only the company.

LittleVoice

Pricivius wrote: »

Until the government amends the WTR to ensure it no longer refers to set off, then employers will seek to rely on it, alongside the transparency/comprehensive policy and ensuring employees take their holiday.

Until a Tribunal, or more importantly the EAT or above declare this practice unlawful, then I would suggest that this remains a grey area.

The simple fact of the matter is that this is not unusual. Many small companies use this method as it is much easier from an administrative point of view. The other point to bear in mind is that it is very unlikely that employees would ever complain about it:
- they get 5.6 weeks holiday pay (or more if their contract provides for it) guaranteed every year. No losing holiday pay if they don't manage to take all their leave.
- often companies will work it out at higher than 12.07% legally required, again for simplicity. I have seen 12.5% given.

I totally agree that the ECJ have declared it unlawful and it is certainly not without risk for the company, but the current advice being given to companies is that the risk is currently small, for the reasons given above and in my previous post.

As an employee, the difficulty you have is that I doubt they would change their method of payroll for one person. There is no risk for the employee, only the company.

Is it not easier to pay the same amount for each pay period instead of adjusting the pay according to how many days have been worked?

getmore4less

if you pay 12.07% and they don't take time off then they work 52 weeks not 46.4 so are ectualy getting paid for 6.28 weeks extra

Pricivius

LittleVoice wrote: »

Is it not easier to pay the same amount for each pay period instead of adjusting the pay according to how many days have been worked?

I'm afraid I am no accountant, but apparently not. At least, that's what I have been told by accountants who run this system in various companies...

getmore4less wrote: »

if you pay 12.07% and they don't take time off then they work 52 weeks not 46.4 so are ectualy getting paid for 6.28 weeks extra

This is why the ECJ declared it unlawful. Employees must be paid for 5.6 weeks and they must take 5.6 weeks - you cannot be paid in lieu (unless you leave with accrued but unpaid leave). Employees should not be encouraged not to take leave but be paid for it instead and this is what the ECJ are trying to avoid. Hence why companies must make every effort to ensure that employees take their leave as they must be able to show this if they are to defend a challenge. But, as getmore4less points out, employees can use this to their advantage, but obviously employers are taking even more of a risk if they allow this.

LittleVoice

Pricivius wrote: »

I'm afraid I am no accountant, but apparently not. At least, that's what I have been told by accountants who run this system in various companies...



This is why the ECJ declared it unlawful. Employees must be paid for 5.6 weeks and they must take 5.6 weeks - you cannot be paid in lieu (unless you leave with accrued but unpaid leave). Employees should not be encouraged not to take leave but be paid for it instead and this is what the ECJ are trying to avoid. Hence why companies must make every effort to ensure that employees take their leave as they must be able to show this if they are to defend a challenge. But, as getmore4less points out, employees can use this to their advantage, but obviously employers are taking even more of a risk if they allow this.

I'm not an "accountant" but have run payroll. It certainly made my life easier to pay someone precisely the same amount each month than to have to get a manager's sign-off on how many hours a variable hours employee worked and then enter that into the system. It cuts down the queries from staff too.