In April 2020, the way you calculate holiday pay for some workers is going to change.
This is part of the largest upgrade to workers’ rights in a generation, and you may have to pay out more for your staff’s annual leave.
Calculating holiday pay for fixed-hours employees is easy but for staff with varied hours—such as workers on zero-hour contracts whose pay packet varies from week to week—it’s more complicated and from the 6th April 2020, the way you calculate this will change because the holiday pay reference period is increasing from 12 week to 52 weeks, so you need to take an average of wages across the whole year.
What will this mean for your business?
For the spa & hospitality sectors, which often rely heavily on seasonal staffing. There may be some additional costs.
For your staff, this change will mean more consistency in their holiday pay as the new law will average out peaks and troughs in working hours caused by busy or quiet periods at work. It also means that you may need to pay workers a little bit more because their average pay will always include your busiest time of year.
Obviously, no one wants their staff overheads to go up but the good news is that any increase to workers’ pay should be relatively small. However, the greatest challenge to business owners will come from the extra admin and legal risk.
Large organisations with dedicated HR departments will no doubt cope with these demands without much fuss. Small businesses should ensure they are prepared and should seek advice from employment law specialists.
https://www.peninsulagrouplimited.com/blog/legal-update-holiday-pay-law-overhaul/
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