How to calculate holiday entitlement for casual workers
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According to UK law, you must give your employees 5.6 weeks of paid leave every year.
This is easy to work out when it comes to full-time employees on a 5 day, 40-hour work week. They will get 28 days of paid holiday per year. It is also easy to work out for employees who work regular, predictable shifts. You simply multiply their number of working days each week by 5.6 to find their annual entitlement.
But what about employees with irregular working patterns? Casual workers, or employees on zero hour contracts, are still entitled to statutory holiday entitlement.
Holiday entitlement for casual workers
The easiest way to work out holiday entitlement for casual workers, is to give them an accrued entitlement. This means they earn holiday entitlement based on the amount of hours they have actually worked.
To make sure employees accrue the UK minimum of 5.6 weeks of paid leave, you can use the rule of 12.07%. In other words, for each hour an employee works, they earn 7.242 minutes’ holiday entitlement.
For example, if an employee works two 8-hour shifts per week for four weeks, then they will have accrued 7.7248 hours’ holiday entitlement – meaning they’ll be able to book the equivalent of nearly one shift off work, and still get paid.
We used the following source for this calculation: http://acas.org.uk/media/955/Advice-leaflet—Holidays-and-holiday-pay/pdf/Acas-guide-Holidays-and-holiday-pay.pdf
You can include bank holidays as part of your employees’ holiday entitlements
If your business does not operate during business hours, you can include bank holidays as part of your standard holiday allowance. This reduces the number of days your employees can book as paid leave, but ensures they are paid for bank holidays.
However, some companies offer a more attractive holiday package, as it can help improve morale, motivation and productivity. For example, you might wish to offer the standard 28 days of paid holiday (or the casual hours equivalent), as well as bank holidays.
How to change holiday entitlement within People®
If you manage employee information using People®, you’ll know that the software automatically calculates holiday entitlements for casual workers and irregular working patterns. By default, the calculation is set to 12.07% of time worked. But did you know you can change this?
If you want to change this calculation, for example to offer employees a more attractive holiday entitlement, then here’s what you need to do:
- Visit your Settings
- Head into Holiday and Absence
- Change the percentage in the Holiday Entitlement field
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