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What's changed? Government updates its guidance on holiday pay

Those of you who are regular readers of our holiday pay blogs will know that we were less than impressed with the guidance the government published to help employers understand how to comply with the complex new rules on holiday which came into force on 1 January this year.

A few weeks ago, Schools Week reported that the government was reviewing its guidance - particularly in respect of term-time workers - following concerns that it was incorrect and could lead to schools and colleges making expensive mistakes.

The guidance was updated on 1 April and makes the following changes: 

Definition of part-year worker

The previous guidance included an example of ‘Ian’ who was paid an annualised (flat) salary over 12 months but has periods of time that last more than one week where he is not working. It went on to say that this arrangement meant that Ian did not qualify as a part-year worker because there were no weeks when he did not work or receive pay.

That, of course, overlooked the fact that Ian wasn't being paid for time when he wasn't working. He was not required to work during school holidays and wasn't paid for time when he was working. The arrangement of paying his salary over 12 months was an administrative convenience which benefitted the employee because he had a regular amount of money coming in every month.

The updated guidance has removed all reference to Ian and has confirmed that term-time workers whose salary is paid in equal monthly instalments will meet the definition ‘so long as there is no expectation of them working in that period and nor are they receiving payment ’for' that period'. 

That's good news. However, because the regulations focus on the contractual provisions, our advice is to make sure that these make it clear that salaried term-time staff are not required to work during school holidays and are not paid for time when they are not working. 

The new guidance makes a few other amendments including to some of its calculations. 

How we can help

If you purchase our holiday pay toolkit we will send you a bespoke report which analyses whether your workers qualify for the new rules on accrual and pay (this will include looking at your term-time contracts and casual hours contracts). We'll also consider any other areas where your approach doesn't comply with the law. We'll provide pragmatic, risk-based advice in the form of a RAG report and help you to decide what approach to take where the law is unclear. We'll also amend your contracts of employment to comply with the new regulations. You'll also get our comprehensive guidance note which explains the new rules, includes FAQs, example pay calculations and flowcharts.  

This is outstanding value for money. Please contact Jenny Arrowsmith or Gordon Rodham if you want to find out more about how we can help you or you'd like to buy the package.

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