Holiday pay legislation changes

The government has introduced changes to the Working Time Regulations to support employers by simplifying holiday entitlement and holiday pay for term time or irregular/part year workers. 

Effective from 1 April 2024, irregular and part year workers’ holiday leave (for example, term time workers) can be calculated in hours rather than weeks and can be accrued on the last day of each pay period, at the rate of *12.07 per cent of the actual hours worked in that pay period. 

Employers will also have the option to:

• pay staff with irregular hours and part year workers when holiday is taken, this is calculated at the rate of a week's pay for each week's holiday, or

• calculate holiday entitlement for irregular hours and part year workers using the *12.07 per cent calculation method. This method uses *12.07 per cent of the hours worked in the previous pay period and permits part-year and irregular hours workers to be paid rolled-up holiday pay. The legislation is based on the statutory minimum, holiday entitlement (5.6 week). * 

*Please note: The above 12.07 per cent calculation method applies to statutory entitlements, any leave entitlements beyond the statutory leave entitlements should be determined locally.

The legislation does not have any implications for staff who have regular hours as there is no change in how their statutory holiday entitlement is accrued.

NHS Employers is reviewing existing guidance to reflect these changes for part year workers, including term time only and updated guidance will be shared in due course.

Next steps for employers:

• To review any separate contracts for staff who, for example, hold a substantive and bank contract and amend to reflect the legislation where needed. 

• For staff with irregular hours, employers will need to review local policies and procedures in partnership with staff side to ensure compliance with the legislation changes.   
• Check that the systems you are using allow you to comply with the changes. 
• Employers should continue to encourage staff to take leave and promote the importance of rest, recovery and health and wellbeing. 

Electronic Staff Record 

If employing organisations choose to introduce this option, details on how to do so can be found in the electronic staff record (ESR) user manual which can be accessed when logged into ESR via the ESR website. 

Further information:

Read the full government guidance on holiday pay legislation.