New ACAS guidance on how to calculate holiday pay

In light of the recent case law, ACAS has published updated guidance on calculating holiday pay. The new guidance is aimed at employees but is useful to employers also, as it confirms that employees could have a claim where they believe their employer failed to take into account ALL elements of pay normally received, e.g. commission and overtime, when calculating their holiday pay.

Employers should be reminded that the Deduction from Wages (Limitation) Regulations 2014 will be implemented on 1st July 2015 and will restrict any holiday pay claims from going back more than 2 years.  Moreover employees cannot bring a holiday pay claim after 3 months from the last date on which they claimed to have been underpaid.  Where the claim relates to several underpayments during a specific period, there should not be more than 3 months between any two underpayments within the series.


Below are the ‘headlines’ for recruiters from the Chancellor’s summer budget 2015
Case from Northern Ireland considers voluntary overtime and holiday pay