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Are you aware of the employment law changes are coming in 2024 that may change the way you have to manage employees holidays and holiday pay. Some of them have already happened so don’t let them wrong foot you and leave you unprepared.
Check out the information below to make sure you are fully informed
What are the key dates for new employment laws in 2024?
January 2024
The emergency rules on annual leave carry over implemented during the Covid pandemic have been removed
Fines for employers who employ illegal workers are increasing. The fine for employing an individual without the right to work in the UK will increase to a maximum of £45,000 per illegal worker, if it it is the employer’s first offence. The maximum fine for an employer who has repeatedly offended will increase to £60,000 per illegal worker.
April 2024
New minimum wage and statutory rates come in to force.
Carer's leave will be introduced
The requirement to have 26 weeks' service before making a flexible working request will be removed.
Pregnant employees will have a right to enhanced treatment during a redundancy exercise
A new method of calculating annual leave for irregular hours workers and part year workers will come into effect.
Look out for more information in my next blog
July 2024
New rules on the method of consulting employees during a TUPE transfer will be introduced.
Employers in the hospitality and leisure industry will need to fairly allocate tips to workers under new legislation.
October 2024
Employers will be under a duty of care to proactively prevent sexual harassment in their organisations.
Also expected are laws will come into effect covering the following but no dates have been published
Requesting a more stable contract;
Neonatal care leave;
Pension auto-enrolment
inimum service levels during strikes.
The Government has announced new rules for holiday entitlement and holiday pay for irregular hours workers and part year workers that are expected to come into effect for holiday years which begin on or after 1 April 2024. If your holiday year runs January - December theser changed will take effect on 1st January 2025.
Under the new rules
Part year workers and irregular hours workers will accrue annual leave on the last day of each pay period on the basis of 12.07% of each hour worked in that pay period, up to a maximum of 28 days a year.
This was a practice that has been commonly used my employers in recent years, however, it was ruled unlawful by the Supreme Court in Harpur Trust v Brazel. The effect of this judgment was that all workers are entitled to a minimum 5.6 weeks per year regardless of the fact they didn't work in every week. The new rules will confirm - via the 12.07% method - that a pro-rata reduction of holiday entitlement for these workers is lawful.
Rolled up holiday pay will be lawful for part year and irregular hours workers for holiday years which begin on or after 1 April 2024. Employers with a January to December leave year will, therefore, be able to apply the new rules from 1st January 2025. Existing contractual obligations will need to be honoured meaning that employers currently giving 5.6 weeks' paid leave to a term time employee, or an irregular hours employee, will not simply be able to change this automatically when the new law comes into effect. In order to apply the new rules, it is likely that a consultation to formally amend terms and conditions will be required.
2024 brings some quite significant changes to holiday and holiday pay; the majority of the changes will be effective from your first new leave year starting on or after 1 April 2024 and will affect the calculation of holiday entitlement for irregular hours workers and part year workers. This means that if you run a January to December leave year, the changes won't apply to you until January 2025.
But some other changes apply from 1 January 2024. Since 2020, your workers have been able to carry over 4 weeks of their holiday entitlement for 2 years where it was not reasonably practicable to take it in the year it was accrued because of the impact of Covid. This rule ended on 1 January 2024, meaning that the standard carry over rules are once again in place.
Any leave that has been carried over under the 'Covid rules' must be taken by 31 March 2024 and cannot be paid in lieu unless employment terminates.
The existing principle that holiday pay should include overtime and commission payments for 4 weeks of leave has been written into the legislation from 1 January 2024, along with carry over rules during sickness and statutory leave e.g. maternity leave. These changes do not represent new rules as they have been common practice for several years due to the effect of case law.
The law on working out holiday entitlement and holiday pay for irregular hours workers (like zero hours workers) and part year staff (like term time only employees) is changing from April 2024 however the new rules only apply to you from the start of your first new leave year on or after 1 April 2024. meaning that, if you have a leave year running from January to December, the new rules apply from January 2025 and your current system should run until then.
If you employ this type of worker, you will be able to choose from the two methods available for their holiday entitlement/pay from the date the new rules apply to you; the 'default' method or the 'rolled' up holiday' method.
The 'default' method means that the worker will accrue holiday on the last day of the pay period at a rate of 12.07% of the hours worked in that pay period. When they take their holiday, you will pay them holiday pay based on their average earnings over the previous 52 weeks.
The 'rolled up holiday pay' method means that you will pay the worker an extra 12.07% on top of their usual pay in each pay packet. This will represent their holiday pay and you will not then pay them when they actually take holiday.
If the method you choose is different to what you are already doing, this will be a change to terms and conditions and this will need to be agreed with staff via consultation before going ahead.
If you need help or support with anything above drop me a line to see how I can help.
