Summer is coming to end and mince pies are already making an appearance on the shelves. It’s time to think about what needs to be done before the end of the year, which for many businesses is also the end of the employee holiday year.
Holiday is important to our employees but it can cause a few headaches for employers. Even more so right now with the impact of the pandemic. So here’s what you may need to be thinking about.
The minimum amount of holiday employees are entitled to is 5.6 weeks. That’s 28 days including Bank holidays for full time employees (pro rata if part time).
Generally speaking, all statutory employee holiday should be taken in the current leave year and not be rolled over into the next year or paid in lieu. This is because holiday isn’t about pay but to take time off to comply with working time regulations. If you give employees more than the statutory leave then you can agree what happens with any unused leave which is additional to their 5.6 weeks.
Exceptions to this are employees on any other leave that stops them from being able to take holiday. Such as long-term sickness or parental leave.
During the pandemic there has also been a temporary rule that if an employee has been unable to take leave due to the impact of coronavirus pandemic up to 4 weeks’ holiday may be carried forward into the following 2 leave years. There are some complexities around this as there may be an impact in both 2020 and 2021 which has prevented holiday from being taken so good record keeping is going to be essential to keep track of what holiday is from which year!
You can read the Gov press release relating to that change in legislation here.
What should you do now?
Carry out a review of used leave and understand the reason why it’s untaken.
If you have excess holiday in 2021 due to allowing carry over from 2020 due to the impact of coronavirus on your business keep that separate from your calculations but let your employees know that it will have to be used by the end of 2022. If you have excess holiday from the 2021 entitlement due to the impact of coronavirus on your business that you intend to allow to be carried over, then keep a separate record of that too. We don’t believe that using up last years’ carry over would be a good “covid reason” to not have taken all statutory holiday in 2021. It would more be the case of, if in 2021 you either had too much work on due to covid or could not afford to top up during furlough for example.
It’s also unclear from the legislation whether 2021 days carried over will need using by the end of 2022 or 2023. (i.e. when does the two years carry over run from?). So as has often been the case in the last 18 months there may be the need for a bit of best guess and just making the decision that fits your needs. Dates to use up any carry over may also vary for you if your holiday year is not January to December.
Wherever possible we’d suggest encouraging any statutory holiday to be taken by the end of this year. So long as you don’t prevent leave from being taken you can implement a ‘use it or lose’ policy. If staff just choose not to take it – you don’t have to allow any carry over into next year even due to covid if you’d rather people used up their holiday this year. We would suggest sending an email each month between now and year end. You’ll have an audit trail to show employees were given every opportunity to take their leave and it won’t come as shock to them in January that it hasn’t been rolled over.
If you are going to allow it, confirm in writing how much holiday can be carried over into 2022. If the reason it hasn’t been taken is pandemic related – at some point you will need to be clear with people that by whatever deadline you set it will be “use it or lose it” as once the covid special regs ends (we assume they’ll revert the working time regs back to non covid rules at some point) there will be no further ability to carry it over ad infinitum.
You can decide which days an employee must take as holiday, but you must give them twice the amount of notice of the holiday itself. This might be useful if you have someone who is reluctant to take time off and has a lot of leave owing to them.
What else do you need to think about? (you mean there is something other than covid going in in the world?!)
There’s also another day to think about next year. The Government has announced an extra Bank Holiday to celebrate the Queen’s Jubilee.
The late May Bank Holiday will be Thursday 2 June with the additional Bank Holiday day on Friday 3 June.
How you will manage the extra date may all depend on what your employee contracts say. The specific wording is going to be important here!
Contracts may say something along the lines of ‘You are entitled to xxx weeks/days paid holiday per year, this includes all Bank and Public Holidays recognised in England’. This will cover the extra day meaning that employees who receive 28 days’ total holiday could have 9 days deducted for Bank Holidays in 2022 rather than the usual 8 giving them a day less to book at their own choice than other years.
If the contracts states something like ‘You are entitled to xxx number of weeks/days paid holiday plus Bank Holidays’, then employees are likely to be entitled to the extra day on top of their usual entitlement.
Of course, you could always decide to give the additional day on top of the usual holiday. Or give a day’s holiday in lieu if your employees need to work. We’d recommend if you can afford it that you give the extra day whatever – the goodwill and happy staff will be worth it!
As with all Bank Holidays there is no actual entitlement to paid time off on the date of that Bank Holiday, as long as over the course of the holiday year the employee receives at least the statutory minimum amount of leave (5.6 weeks including the allowance for the 8 usual Bank Holidays and this is all pro-rated for part-time staff).
Whatever you decide to do you should let your employees know as soon as possible.
We’re already seeing holiday requests for next summer, your teams will need to know if they have less time to book for themselves than they would usually. Peoples plans may also be affected by the moving of the usual Bank Holiday from a Monday to a Thursday.
Ensure that any holiday management system is updated to reflect the changes for 2022. Be that an HR portal or a simple spreadsheet.
If you’ve kept on top of your staff holiday this year this won’t be too much of a concern. However, if you find manually managing annual leave is taking more time than it should we could help you. ask us about BreatheHR and how it will make your HR Admin less of a chore.