Holiday entitlement is the amount of annual leave the government allows your employees to receive while working for you.
This can be a tricky area of employment law and it’s important you know how to make the correct calculations.
Getting employee holiday entitlement wrong might leave you open to costly tribunal claims. Call us on 0800 028 2420 for immediate support with avoiding this outcome.
Our guide also provides essential information on your business’ legal standing and the rights your employees have.
Statutory holiday entitlement
The legislation states all employees and workers have entitlement to a period of minimum paid holiday entitlement.
Statutory minimum holiday entitlement in the UK for full-time employees is 28 days or 5.6 weeks. That includes public holidays per leave year.
A leave year is 12 months within which you must provide 28 days leave. It can start and begin at any point you wish—many employers choose either:
- January to December.
- April to March.
You’re free to provide additional annual leave entitlement. For example, offering 30 days. However, 28 days is a minimum allowance so you can’t go below this.
Employees and workers have the right to:
- Get paid for leave.
- Build up (‘accrue’) holiday entitlement during maternity, paternity and adoption leave.
- Accrue statutory entitlement while off work sick.
- Request holiday at the same time as sick leave.
How to work out holiday entitlement
The situation becomes more complex for staff who start their job mid-way through the leave year, work part-time, or whose hours vary.
Full-time workers with annual holiday entitlement normally accrue 2.33 days per month from the first day of employment.
This means an employee who’s worked for the company for three months may take 6.99 days. You’re free to permit them to take more days, but not less.
The legal holiday entitlement in the UK also accrues during other periods of absence. This includes:
But you can make a statement in the contract of employment (or other document stated to have a contractual effect).
Make it clear staff can take the holiday accrued during these periods during the garden leave/suspension.
You calculate part-time holiday entitlement by pro-rating down the 28 days according to the days that the employee worked.
For example, an employee who works three days per week must get at least 16.8 days leave a year, as you take the three days and times it by 5.6.
Staff may not work the same number of hours every week.
For example, you may employ zero-hour workers that work shifts as and when required. Workers in this position should still be able to take holidays, but calculating their entitlement is sometimes complex.
Legislation calculates holiday in terms of 'weeks', providing for accrual of holiday in the first year as being at a rate of 1/12 of the annual entitlement each month.
However, where hours worked are irregular and we can’t predict the annual entitlement with certainty, this formula is of little help.
There are no clear regulations on how to convert the 5.6 weeks of holiday entitlement into days or hours for workers with irregular hours.
A common method was to calculate holiday entitlement based on the number of hours worked. On this basis, holiday accrued at the rate of 12.07% per hour worked.
Recent case law has called this method into question, so to make sure you are getting this right it’s highly advisable to use an annual leave entitlement calculator or get advice from an employment law specialist.
Maternity leave entitlement
The government outlines how to calculate maternity and paternity leave entitlement. You still accrue your holiday entitlement while on:
- Maternity leave
- Paternity leave
- Adoption leave
- Shared parental leave
Bank holiday entitlement
You don’t have to include public holidays in an employee’s holiday entitlement. It’ll depend on your policy on this and the needs of the business.
Contracts of employment may stipulate that it requires all employees to take off all bank/public as part of the statutory holiday entitlement or may stipulate it includes only particular bank holidays.
There may be a contractual term (or business need) that requires staff take no bank holidays as paid leave.
Another is you pay bank holidays at an overtime rate or through a time-in-lieu system.
Annual leave and staff disputes
Paid annual leave is a legal right you must provide. If a worker thinks you’re not meeting their right to leave and pay, there are several ways to resolve the dispute.
Getting advice from an employment law or HR consultant ensures you navigate this tricky area of law with confidence.
Need our help?
Ensure you provide your staff with the legal amount of annual leave, as well as retain staff with some great internal leave policies. For advice on this, call our expert HR consultants on 0800 028 2420.