The government is making changes to how holiday pay is calculated for part-time and irregular hours workers, starting from January 2024. This will affect various sectors, including social care providers and other businesses.
The new rules aim to clear up confusion from a recent court case. For part-time and irregular hours workers, holiday pay will be calculated as 12.07% of the hours worked in a pay period. This is designed to make things fairer for all.
Previously, a practice called ‘rolled-up’ holiday pay, where employers add holiday pay to the hourly rate, was not allowed. However, under the new changes, it will be allowed for part-time workers, those with irregular hours, and some agency workers. Full-time staff won’t be eligible for this, addressing concerns raised by 45% of respondents during a consultation.
The changes also affect TUPE rights during organisational transfers. Small businesses can directly consult new employees if there are no existing worker representatives. If there are representatives, such as trade unions, employers must consult them.
These reforms are a big step in simplifying calculations and ensuring fairness. As businesses get ready for these changes, it’s important to communicate openly, be transparent, and follow the new rules. This will create a positive work environment for both employers and employees in the social care sector and beyond.