Get Your Staff Holidays Right over Christmas
As part of a small
business you will be aware that during the
Christmas season your staff are likely to be
regularly away on holidays for shopping and
other activities. This means you need to be
well prepared for booking holidays and
ensuring cover for your business. However,
after recent changes to the holiday pay
legislation; many businesses are still
struggling to find out whether their holiday
calculations are correct and how many days
of holiday their staff have remaining.
The changes will not
have too much of an effect on your Christmas
holiday pay this financial year. They
basically meant that employees who did not
get bank holidays off (or are required to
take them as paid holiday days) are entitled
to up to 4 extra holiday days over the
course of the year to replace them.
In other words, every
full time employee working 5 days a week has
24 days of holiday, up from 20(28 from 1st
April 2008). However, those holiday days can
include bank holidays; so employees that are
already given all bank holidays off
will not get the 4 extra days as they will
be counted for 4 of the bank holidays.
The system is
relatively simple at heart, but is run in
such a way that it makes it much more
complex than it should be!
The complexity lies in
the fact that for the financial year
including October 2007 the leave needs to be
added proportionally from its introduction
in October. So if your financial year ends
in December, you will have to add three
months worth of proportional leave (4 days /
12 months x 3 months = 1 day extra). If your
financial year ends in March you have to add
six months worth of proportional leave (4
days / 12 months x 6 months = 2 days extra).
In other words, If
within those months; your employees are not
given Bank Holidays (including Christmas
Day, Boxing Day, and New Years Day) off as
paid leave, they will need to have up to 4
days added (depending on how many days they
are proportionally entitled to, as shown
above).
Bear in mind that if
your financial year ends in December, then
New Years Day will be the first bank holiday
of next financial year; so up to the full 4
days of extra holiday could be relevant.
Examples:
All examples are for companies with financial years ending in
December. This means their employees only
have a maximum of one additional holiday day
for this year.
Example 1: John
and Alan both have 3 days of holiday
remaining.
John gets Christmas Day
and Boxing Day off as paid leave, therefore
he has 3 days remaining.
Alan has to work Boxing
Day (or take it as a holiday day), therefore
he is allowed an extra day of holiday to
replace it; providing he does not go over 24
days for the year (after which he is no
longer entitled to it).
Example 2: Steve
works full time, and has been given every
bank holiday of the financial year off as
paid leave. Therefore he is still only
legally required to have 20 days (4 weeks)
of holiday for the year. As he does not work
any bank holidays, and does not need to take
any of them out of his holiday entitlement;
his ‘extra days’ are counted as 4 of the
bank holidays.
Example 3: Ian
has to work on Christmas Day and Boxing Day.
Next financial year he
would be entitled to 2 additional holiday
days, providing his total was not over 24.
However, for this
financial year he is limited to one
additional holiday day because the company’s
financial year ends in December.
Of course you also
need to remember that part time employees,
employees who work more than five days a
week, and employees who joined part way
through a year will need their allowances
adjusting proportionally.
Happily the DTI has an online calculator to
help you work out holiday days. You can find
it at Business Link here.
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