Empowering the Freelance Economy

Rolled-up holiday pay: temps and contractors to soon get holiday pay drip-fed into every paycheque

Photo by Colon Freld via Pexels
1 701

The UK government has approved a new policy allowing temporary workers to receive their holiday pay as part of their regular wages. This is known as rolled-up holiday pay, and it is expected to give millions of temps a pay boost worth thousands of pounds each year.

Rolled-up holiday pay is already common in some industries, but it has not been available to all temporary workers until now. The new policy will apply to all irregular-hour workers and part-year workers, which includes around 1.6 million people in the UK.

Many temp workers are not even aware that they are entitled to holiday pay and that means many have never claimed it. There are cases where umbrella companies have pocked worker holiday pay, which is something that is under scrutiny among other unjest payroll practices by several contractor advocacy groups and law firms.

Temp workers who qualify for rolled-up holiday pay will receive it in addition to their regular wages. This means they will be guaranteed to receive their holiday pay, even if they do not take all their holidays. It will be paid into each pay cheque rather than when they take their holiday.

The government estimates that rolled-up holiday pay could boost the average temp worker’s pay packet by as much as £1,000 per year. This is a significant amount of money, especially for low-paid workers.

The new policy is a welcome move for temp workers, who often have less bargaining power than permanent employees. It is also a good step towards ensuring that all workers are treated fairly, regardless of their employment status.

Temp workers and umbrella company contractors should start to see their holiday pay rolled up into their regular wages in early 2024. They should ensure their payroll or umbrella company abides by this new rule. If they do not you should immediately get in touch with HMRC.

Here’s how holiday entitlement works in the UK

At the time of writing, everyone in the UK is entitled to statutory paid holiday. This is the minimum amount of paid holiday that employers must give to their workers. The amount of statutory paid holiday you are entitled to depends on how many days a week you work. Most workers are entitled to 28 days’ paid holiday per year. This is the equivalent of 5.6 weeks of holiday.

However, there are some exceptions to this rule. For example, workers under the age of 18 are entitled to 20 days’ paid holiday per year, and workers who work part-time are entitled to a pro-rata amount of holiday.

Working part-time

Part-time workers are entitled to at least 5.6 weeks paid holiday, but this will amount to fewer than 28 days.

For example, if they work 3 days a week, they must get at least 16.8 days’ leave a year (3 × 5.6).

To read more, go here: Holiday entitlement: Entitlement – GOV.UK (www.gov.uk)

Calculate holiday pay here: Calculate holiday entitlement – GOV.UK (www.gov.uk)

1 Comment
  1. Colin Haynes says

    Hi,

    I am currently working for an umbrella company and didn’t get paid Bank Holidays. I also have to pay their NI as well as my own. I’m an engineer and not a financial expert therefore I am not clear if this is how it should work. I also do not get paid holiday pay too.

Leave A Reply

Your email address will not be published.