Bryan HayOver two-thirds of UK employers (69%) have not yet updated their holiday entitlement and pay calculations to comply with the new Working Time Regulations, which came into effect on April 1, 2024. This is according to a recent survey by WorkNest, an employment law and HR consultancy firm.
The new regulations, which significantly affect ‘irregular hours’ and ‘part-year’ workers, seem to have left many employers uncertain about the changes. According to WorkNest’s findings, 40% of employers have not taken any action because they are unsure if the changes affect their workers, and 23% acknowledge that they have no plans to make any changes.
Lesley Rennie, Principal Employment Law Solicitor at WorkNest, highlighted the challenges faced by employers: “Although the holiday pay and entitlement reforms for irregular hours and part-year workers came into force for those businesses with a holiday year beginning on or after 1st April 2024, our survey shows that many employers are still grappling with the new concepts. Calculating holiday entitlement and pay has been a notoriously tricky and a highly complex area for many years now and in some ways, the introduction of these new categories of worker and associated holiday rules are to be welcomed as they signal the return of the much-favored 12.07% accrual formula which many employers had continued to apply. But the ambiguities around the definition of the new categories of worker – the “irregular hours” or “part-year” worker – is confusing for employers and adds a further layer of complexity.”
The survey also indicated a significant demand for additional guidance, with 59% of employers agreeing that further clarification is needed to understand how to implement the legislation effectively.
Rennie further warned of the risks associated with this uncertainty: “Unfortunately, this uncertainty will continue until either the Government further updates its guidance or there is case law specifically dealing with the meaning of these definitions. In the meantime, employers must proceed on the basis of their best assessment, which is a far from ideal situation given that this risks non-compliance and in turn legal consequences for employers. Whilst we await further Government or judicial guidance on the meaning of these terms, we urge employers to seek expert help if they are unsure how to proceed. Even if your holiday year has already restarted on the 1st April, it is not too late to take action.”
