1. Managing holiday requests and leave

Under current UK employment legislation, all employees are entitled to a minimum of 5.6 weeks of annual leave per year (this equates to 28 days including bank holidays), calculated pro-rata based on the hours they work per week.

• Importance of taking holiday
  It is important to ensure that employees take annual leave. Not only is annual leave a legal requirement, but it is also essential to promoting the work-life balance of your employees. Annual leave offers a powerful defence against employee burnout, prevent sickness absence and can boost the productivity of your workforce.  As the Holiday year nears its end, it is important that employers remind employees of how much entitlement they have remaining and advise them to take it. Most companies don’t allow carryover unless employees have been on Sick Leave, Maternity Leave, or exceptional circumstances. However, if an employer refuses an annual leave request that could have reasonably been taken or does not remind their employees to take annual leave, then this should be carried over. If you need further advice regarding this, do speak to us.
• Managing holiday for irregular hours workers
  For those people working irregular hours, the assumption is that they have time off during part of the week (hence the calculations in this document). However, some irregular workers may have multiple jobs or may work a full week from time to time. So how do you as the employer ensure your employees are getting time away from work? Employers should discuss with their employees how they would like to manage their holidays; for example, if they don’t want to take payment each week but want to take holidays for which they’re paid, make sure you’ve documented that and calculate that accordingly. If you have further questions, contact us.
• Breathe HR
  Are you struggling to manage your employee’s holidays leave? Are you spending too much time managing employee holiday leave? Are you regularly miscalculating leave entitlement? If you said ‘yes’ to any of the above, Breathe HR may be a welcome solution to your holiday management woes. You can cut down your admin time with Breathe HR’s automated holiday management software by up to 4 hours per week by putting your employees in control of their
  holiday management. Breathe HR’s innovative software allows employees to digitally request leave whenever and
  wherever – say goodbye to those pesky paper holiday slips! See who is out of office at a glance by making use of an organisation-wide shared calendar. Run holiday usage reports to produce helpful visual overviews of holiday usage – spot employee burnout and stop it in its tracks. Whether you prefer to calculate holiday entitlement in days or hours, Breathe HR’s free handy holiday calculator will help you get those calculations correct. Interested? Click HERE to arrange your FREE Breathe HR Holiday Management Demo with Leah from We Do HR and see how the software can work for you, or alternatively, call the team on 01325 488425 for more information.

2. Allocation of tips – changes to legislation

The way tips are going to be distributed in the hospitality industry is changing. The Employment (Allocation of Tips) Act 2023 has called for more transparency in businesses who collect tips, service charges and gratuities from paying customers, to ensure tips are going back to the staff who work hard to provide excellent customer service. 1st October 2024 is the official deadline date; however, businesses are advised to start implementing policy now to ensure it is embedded in company
culture and any bumps along the way can be smoothed out.

• What does this mean for my employers?
  All tips received must now be allocated to employees; no tips can be withheld, and they must be distributed fairly (ie based on hours worked per week). Tips will continue to top-up wages and must not be used to make up a minimum wage. If not already done so, it is advisable to record tips on employees’ payslips as a separate payment from their monthly/weekly wage.
• Keeping records and transparency
  Records of tips distribution must be kept for 3 years from the date received, and employees can request to view these at any time. Employers who receive tips from paying customers must have a written policy that sets out the company’s practices and processes, and employees can lawfully request to view it at any time.
• What remains the same?
  Employees cannot receive tips for a period of time they are on sick leave, holiday, parental leave, suspension from work or not working a notice period.
• What if we underpay someone’s tips?
  If it’s accidental, ensure employees affected are paid their fair share of the tips as soon as possible after the error was identified. If an employer was taken to tribunal by an employee for unfair tipping and this was found to be true, the company would have to look back at their previous tips allocation and may have to pay compensation in addition to back payment of tips owed, for all workers not just the employee(s) who complained.

3. Calculating holiday for irregular hours workers

All employees are entitled to a minimum of 5.6 weeks holiday per year calculated on the number of hours they’ve worked. This can be challenging when you deal with a lot of irregular hours staff. So how do you calculate their holiday entitlement?

• The calculation
  It is easier to calculate on a monthly basis, as you receive an average number of hours to calculate with. However, this is exactly the same if you operate a weekly payroll and wish to calculate holiday accrued each week. Follow the steps below:
  1. Divide the hours worked in the month by 100
  2. Multiply this by 12.07
  3. Round up or down to the nearest hour (if it’s less than 30 minutes, round down; if it’s more
  than 30 minutes, round up)
• Example:
  An employee works 68 hours in one month. You will have to calculate 12.07% of 68 to find how many hours of holiday they have accrued:
  1. 68 ÷ 100 = 0.68
  2. 0.68 x 12.07 = 8.2076
  3. 8.2076 rounds down to 8 → therefore, they’ve accrued 8 hours of holiday
• Do irregular hours actually take holiday or are they paid it?
  If an employee says that they wish to take the hours in the future and therefore take actual paid holiday, then you would calculate the period since the last payment date at 12.07% and pay them for that at that point in time. If they choose not to take these hours, then they should be paid on a regular basis regardless, and always show it as a separate line on the payslip. We advise employers request either of these options in writing for your records.
• What if my employees are entitled to more than 5.6 weeks of leave?
  If an irregular hours worker’s contract entitles them to more than 5.6 weeks of leave a year, then a higher percentage needs to be used for the calculation.
• Fixed hours instead of irregular hours
  If an employee is on fixed hours and it is less than full time, they are not an irregular hours worker, but you still need to calculate the entitlement based on hours worked. The calculation for this is: days in employment during the leave year ÷ days in leave year x 100 = number of days holiday accrued.
  This can also be used for calculating entitlement remaining for the rest of the holiday year. Breathe HR calculates this in advance and enables employees to allocate holiday so employers know well in advance when their employees are likely to be on holiday for the coming months.