Following a decision by the Employment Appeal Tribunal, your employees may be entitled to have regular overtime included when calculating their holiday pay. This applies to all employees who are obliged to work overtime where requested by their employer and this ‘non-guaranteed’ overtime must be taken into account in holiday pay calculations if there is a settled pattern of work or if there are regular overtime payments, even if the number of hours is variable.
Howell & Co can help employers review their working arrangements to see whether they may be affected by the tribunal decision. If affected, there may be a liability for back-dated payments, although the government has introduced regulations to limit the amount to two years, which takes effect from 1st July 2015. Further guidance is available on the ACAS website.