Managing the 2021 holiday season: recapping last year’s Holiday Pay changes

UK Government guidance has changed once again, altering the rules on quarantine for travellers returning from countries on the amber list.

Fully vaccinated adults and under-18s now no longer have to self-isolate when returning from an amber-listed country.

So, what can we expect from holidaymakers? We’re predicting a surge in people rushing to make the most of the remaining summer, as they can once again book flights and hotels with some added confidence.

But as the Holiday Pay process was altered last April, we’ve created a quick recap blog to help businesses ensure their operating correctly and compliantly when managing employee vacations.

How did Holiday Pay change in 2020?

The changes to Holiday Pay mean that employers now need to include every aspect of an employee’s pay in their Holiday Pay calculation, including:

• Commission
• Additional payments
• Non-voluntary/voluntary overtime

To quantify this change, if an employee typically earns £500 commission each month, this now needs to be included in their Holiday Pay.

However, pay modifiers such as an annual bonus shouldn’t be factored into the calculation.

Last year’s changes also ensure that workers in seasonal work or with irregular working hours receive the paid holiday to which they are entitled. 

So, if a worker has been employed for at least 52 weeks, the holiday reference period is expanded from 12 weeks to 52 weeks

Do the Holiday Pay changes apply to your business?

Don’t worry if you’re unsure whether last year’s Holiday Pay changes apply to your business.

We’ve created a Holiday Pay identifier that in a couple of simple steps, you can learn what the law says and discover how you should be calculating entitlement and pay.

Click here to access the Holiday Pay identifier.

How can IRIS help?

To help you manage these changes, we’ve created a module that automatically configures Holiday Pay, ensuring you never have to do a manual calculation again - find out more here.