Increasing holiday entitlements will escalate wage costs, warns a law firm ahead of the October legislation.
Workers are currently entitled to a statutory minimum of 20 days of paid time off per year including bank holidays. As of 1 October 2007 this increases to 24 days and 28 days from 1 April 2009.
This new legislation will mean that all workers will have a minimum of 20 days of paid holiday in addition to the eight bank holidays. Lawyers, Bird & Bird equate this to a 40 per cent increase in holiday entitlement and warn this extra wage cost for some employers will increase by over 3 per cent as a result.
Commenting on this, Bird & Bird employment lawyer Elizabeth Lang said:
“This change is going to have a real financial effect on many employers. This may particularly be the case in sectors which rely heavily on agency workers and other seasonal and hourly paid workers, who are commonly only given the statutory minimum paid holiday entitlement of 20 days. Even employers who currently offer more than 28 days of paid holiday to their workers will have to make adjustments to comply with the new regulations governing the administration of holiday. There will be less freedom to allow employees to carry holiday over from one year to another and to make payments in lieu of holiday.”
Under the new regulations some or all of the additional holiday may be carried forward to the next holiday year.
As from 1 April 2009 no payment in lieu of the 28 day statutory holiday entitlement will be permitted except upon the termination of employment. Part-time workers will be entitled to the extra holidays on a pro-rata basis.
