Significant updates to the Working Time Regulations 1998, initially modified in January 2024, are introducing new provisions from 1 April 2024. These amendments specifically address leave entitlements for workers on zero-hours, irregular hours, and part-year contracts, including those employed on a seasonal basis.
Under these new definitions, workers with variable hours each pay period or those employed for only part of the year, like zero-hours contract workers or students working term-time only, will be affected.
Key features of the upcoming amendments
The primary goal of these changes is to simplify the holiday entitlement calculation for irregular hours workers, ensuring they receive fair holiday allocation without the risk of under or overestimation.
Holiday accrual will now be directly linked to the hours worked, calculated at a rate of 12.07 per cent of the hours worked during each pay period, transitioning entitlement calculations from days to hours.
Options for calculating holiday pay
The revised Working Time Regulations also outline two methods for calculating and delivering holiday pay to workers:
Though the ‘rolled up’ holiday pay method was previously not permitted, it will become an option from 1 April 2024, with specific guidelines to ensure transparency and fairness.
Employers must indicate the holiday pay portion on payslips and ensure it is paid alongside the pay period in which the holiday is accrued, based on the total earnings for that period.
Implementation Timeline
The new rules take effect on 1 April 2024, but the application is contingent on the start of the employer’s holiday year. Workers will be eligible for the updated holiday entitlement from the first holiday year commencing after 1 April.
For instance, if an employer’s holiday year aligns with the fiscal year (1 April to 31 March), the changes apply immediately.
However, for holiday years beginning on other dates, such as 1 January to 31 December, the new entitlements will start from the beginning of the next holiday year, in this case, 1 January 2025.
