A new government campaign has been launched urging employers to do more to ensure correct payment for annual leave and to improve awareness among employees of their holiday pay entitlement.

The responsibility to ensure the correct calculation and payment of workers’ holiday pay lies with employers, but recent figures show an alarming number of employees are not receiving their full entitlement.

Workers are losing out on nearly £3 billion in paid leave a year, according to analysis by the TUC of data from the ONS Labour Force Survey from 2017. The analysis also showed 2.2 million workers in the UK are receiving below their legal entitlement, while 1.2 million workers are receiving no annual leave at all.

Under the new campaign, the government is placing the onus squarely with employers to get to grips with the rules and ensure their employees are benefiting from what they are lawfully entitled to.

The drive to correct holiday pay levels comes in the wake of the Taylor review into workers’ rights. With wages failing to keep pace with the rising cost of living, it has become even more critical that employers are observing employment practices and that workers are receiving their full entitlement in terms of both pay and time off work for health and wellbeing.

Flexible workers at greater risk

The campaign comes as research is released by the Department for Business, Energy and Industrial Strategy (BEIS) suggesting widespread misconceptions among flexible workers of their actual entitlement to holiday pay.

In an independent survey of 2,000 individuals in non-9 to 5 roles, 50% believed zero-hours contract workers were not entitled to any holiday pay. 52% believed they only became entitled to holiday pay after 3 months employment. Both beliefs are incorrect under law and are resulting in workers missing out on pay and time off.

Employees in retail, education and health and social care and agriculture are most likely to be short changed, according to the TUC’s analysis.

How is holiday pay entitlement calculated?

By law, most workers benefit from statutory leave entitlement. This includes those working full time, flexible, casual, compressed or irregular hours, those on zero hour contracts as well as shift and agency workers.

Under current rules, entitlement is accrued for every hour worked. In most cases, this will equate to 5.6 weeks of paid holiday each year. Employers can include bank holidays in this.
Employees also have the right not to suffer any detriment for exercising their right to receive their holiday entitlement.

To support businesses in getting to grips with the rules, the Department for Business, Energy and Industrial Strategy (BEIS) has released new guidelines on holiday pay entitlement, as well as offering an online entitlement calculator to help employers and employees with annual leave entitlement calculations.

As Editor of Lawble, Gill helps business and individuals become better informed about their legal rights. Gill is a content specialist in the fields of law, tax and human resources.