Holiday Pay for Temporary Staff

We’re going to be making some changes within UK clients’ Watu accounts with regards to the way holiday pay for temporary staff is displayed. These changes are based on the government’s guidelines and are coming into place so that we can best help our clients to stay within the recommended rules.

Currently, clients can only display the total wage for shifts. Although subsistence and expenses can be added on top, there is no space to add holiday pay. Our goal is to now rebuild this part of the software so that holiday pay can be shown in addition to the daily wage, as well as the grand total for the staff member. These changes will be reflected in the job build, adverts, confirmations and in payroll as well.

What are the rules surrounding holiday pay?

The government currently requires that temporary staff be paid holiday pay on top of their daily wage. This wage must be stated at the time of booking and on the payslip and must not be rolled into the daily wage; for example if your T&C’s state that a staff member’s daily wage includes the holiday pay, this is against the rules. As stated in the website

“Holiday pay should be paid for the time when annual leave is taken. An employer cannot include an amount for holiday pay in the hourly rate (known as ‘rolled-up holiday pay’). If a current contract still includes rolled-up pay, it needs to be re-negotiated.”

Why has no one mentioned holiday pay before?

Most staff – and many managers as well – are not aware of the the details of the law, so agencies are not in a rush to separate the two. Things have been working so far, but this could change if someone raises an issue about how holiday pay should be laid out or alternatively if a government body looks into your specific agency

How has Watu calculated the holiday pay rate?

Using the ACAS site for guidance, we have based it on the following;

“If a member of staff works on a casual basis or very irregular hours, it is often easiest to calculate holiday entitlement that accrues as hours are worked. The holiday entitlement of 5.6 weeks is equivalent to 12.07 per cent of hours worked over a year. The 12.07 per cent figure is 5.6 weeks’ holiday, divided by 46.4 weeks (being 52 weeks – 5.6 weeks). The 5.6 weeks are excluded from the calculation as the worker would not be at work during those 5.6 weeks in order to accrue annual leave.”

So when a manager enters the total wage into the job build, Watu will automatically divide it into ‘daily wage’ and ‘holiday pay’, taking care of the 12.07% maths for you.

Automatic Implementation

This feature is an opt-out feature within Watu. What exactly does that mean? Once it’s live, it will automatically be applied to your account. If you do not want this change this affect your account, then you must opt-out once we announce that it’s been made live. This can be done in the general settings area of your account.

The subject of holiday pay is complex and has a lot of ‘grey area’. If you believe this feature can be improved or have any important feedback, please do let us know.


Photo by Olin Gilbert

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