20 Nov 2024

What is the statutory holiday entitlement for employees?

As an employer, it's crucial to understand the ins and outs of holiday entitlement and how it applies to your employees. Whether you're managing full-time employees or those with irregular hours, ensuring you're compliant with employment law is key to maintaining good employee relations and avoiding costly mistakes. This Q&A has been designed to answer the most common questions employers ask about holiday pay, carryover rules, and holiday scheduling, providing you with the clarity you need to manage your employees' leave effectively. Here are the key points you should know:

General Holiday Entitlement & Rules

What is the minimum holiday entitlement I must provide to employees?

Employees are entitled to at least 5.6 weeks of paid holiday each year. For full-time employees, this is equivalent to 28 days, including Bank Holidays. However, you can offer more leave if specified in the contract. Employees cannot choose holiday times that conflict with your business needs. You can learn more about Holiday entitlement: Entitlement - GOV.UK here.

What are the holiday entitlements for part-time workers?

Part-time employees are also entitled to 5.6 weeks of paid leave annually, pro-rated to their hours. Pay is calculated based on the average earnings of the last 12 weeks (excluding weeks with no earnings). Use the GOV.UK Holiday Entitlement Calculator here - Calculate holiday entitlement - GOV.UK

How much notice should an employee give when requesting holiday?

Employees should give notice of at least double the length of the leave they wish to take unless your policy specifies otherwise. For example, they need to give 2 weeks’ notice for 1 week’s leave.

Can I refuse an employee’s holiday request?

Yes. For business reasons, you can refuse a holiday request. If the leave is already booked, you must provide notice equal to the length of the leave requested (e.g., 2 weeks’ notice to cancel 2 weeks of leave). However, you must ensure employees can take their minimum statutory entitlement of 28 days annually.

Can I require employees to take holiday at specific times?

Yes. You can specify when employees take their leave, such as during Christmas shutdowns or Bank Holidays. You can also require employees to take leave during their notice period.

Do I have to pay employees extra for Bank Holidays?

Not necessarily. Bank Holidays can be included as part of the statutory 28-day entitlement unless your contract provides otherwise.

Can employees carry over unused holiday to the next year?

This depends on their contract. By law, employees can carry over up to 8 days (of their 28-day entitlement) if agreed. If an employee is unable to take their statutory leave due to sickness or maternity leave, they can carry over up to 20 days.

Are employees entitled to payment for unused holiday?

Unused leave is not paid unless employment ends, at which point any accrued holiday must be paid.

Can an employee cancel their pre-approved holiday?

No. You are not obligated to accept cancellation unless your policy or contract allows for it. Pre-approved holiday may involve business planning, so it’s reasonable to refuse.

Holiday Pay & Payment Issues

Can employees take payment in lieu of holiday?

Only upon termination of employment. Any accrued but unused holiday must be paid at this time. You may require employees to take their remaining leave during their notice period, subject to your business’s needs.

Can I deduct overpaid holiday pay from an employee’s final salary?

Yes, but only if this is explicitly stated in the employee's contract or another relevant agreement.

Does overtime or commission affect holiday pay?

Yes. Recent rulings allow overtime and commission to be factored into holiday pay. Consult the latest guidance or legal advice to ensure compliance.

How far back can employees claim unpaid holiday pay?

Claims for unpaid holiday are limited to a two-year period before the claim date under the Deduction from Wages (Limitation) Regulations 2014.

Sickness, Leave, and Holiday Interaction

What if an employee falls sick during their holiday?

If an employee is sick during booked holiday, they may claim back those days and, in some cases, carry them forward. They must provide appropriate evidence of their illness.

Can employees go on holiday while on sick leave?

Yes, but they must seek approval, and you can refuse in line with your usual holiday policies. For more information, click here Holiday, sickness and leave | Acas.

Holiday During Employment Termination & Notice Period

Can employees take holiday while working their notice period?

Yes, but it is at your discretion. You can decline the request if it disrupts the business. Alternatively, you can require them to use their remaining leave during their notice period or pay in lieu for untaken leave upon termination.

Can I cancel an employee's pre-approved holiday?

Yes, but only with appropriate notice equal to the leave length (e.g., 4 days’ notice to cancel 4 days’ leave). You cannot cancel leave if it prevents the employee from taking their full annual entitlement. If cancellation causes financial loss, you could face claims for constructive dismissal.