If your employees are regularly paid overtime, commissions, or bonuses, you should likely be factoring this into any holiday pay they receive.
Following recent court cases and legislative updates employees should now receive ‘normal remuneration’ when they’re on annual leave, this should be calculated using a 52-week average, for all staff with regular extra payments.
Unfortunately, there is no guidance on what an employer should class as ‘normal remuneration time’ so as a baseline we would suggest 50% of the time, i.e if the employee is receiving overtime, commissions, or bonuses for half of their working time, then you need to be reviewing their holiday pay moving forwards.
You may consider a different approach to 50%, and if you can rationally defend your reasoning for what you consider ‘normal’ then you can implement, at this time there is no set guidance.
If you would like to discuss this matter further, please contact our Payroll Manager, Joe Cherry at the office on 01623 420269 or by email joseph@stopfords.co.uk
