Extending paid holiday entitlement

Government announces consultation on the increase of paid
holiday entitlement under the Working Time Regulations to include public
and bank holidays.

The DTI has announced a consultation on extending the current right
for all workers to 20 days’ paid leave each year by a further 8 days to
reflect bank and public holidays “UK Holidays”).

If after the consultation the government decides to proceed with
legislation to extend leave entitlement, the result would be that all
workers will be entitled to 28 days paid holidays instead of 20 days.

Some issues
Most employers already absorb UK Holidays as paid, since most employees are not paid on an hours worked basis.

However an extension of leave entitlement would particularly affect
employment businesses supplying paye temps, who are paid on an hours
worked basis only.

The net result of any extension would be to push the amount
attributable to holiday pay up from the existing 8.33% of normal rate to
12.07% resulting in a higher pay out by the employment business or
employer. However, the calculation changes if the rate is not charged
over a full year.

To be kept up to date with this and other current issues which have an effect on your company and industry register for Agencyzone, Lawspeed’s free newsletter service.

HMRC announces start of a review of the concession
Good news on employment status