Casual staff/Holiday pay - The Book-keepers Forum (UK)

Count1314 · Senior Member

Casual staff/Holiday pay

Zoe · Senior Member

Hi, I find the Direct Gov website a great help when trying to work out holiday for unusual work patterns. There is a holiday entitlement calculator for casual workers and it should give you all the information you need.

The link is here - https://www.gov.uk/holiday-entitlement-rights/entitlement

Kind regards

Zöe

Count1314 · Senior Member

Thank you......I am fairly familiar with the rate and calculation for casual staff (28 days = 5.6 weeks = 12.07% of hours worked) [So not the 12.08% I mentioned earlier!].

My questions related to when it could or should be paid.....however there is nothing I can do about it now! I also wondered if the rate should come down for a part year, but since it is a percentage it works for any period. So I am happy with this now! Thanks.

FoxAccountancyServices · Expert

I have never really had to do holiday pay. But I am curious.

When I think about casual staff holiday pay, I would work out how many hours holiday an employee is entitled to, in any given period.... let say a year. I would use the online calculator to give me the number of hours allowed in that year, and then, I would pay an employee as normal, when they had time off, until those hours ran out.

Then if they left mid year, I would use the calculator again, to work out the time allowed for the actual period, and compare that to how many hours they had taken so far - which should give me is was owed to me/them.

Is that not right? The idea of a % is totally confusing me, how does that work? Sorry for being thick. Hate PAYE stuffs!

Count1314 · Senior Member

I suppose when it comes to casuals who only work when they are needed and so don't exactly take holidays (they would have to accept the shift and then say they are taking it as a holiday! smile ) there has to be a way of paying them holiday pay which they are still entitled to.

The calculation is based on 28 days per year. This is 5.6 weeks and the rate is based on this 5.6/(52-5.6) = 12.07%.

So rather than considering number of days/hours etc you can simply pay/accrue 12.07% of all hours worked. I suppose this means that when paying minimum wage to casual staff, it is actually minimum wage + 12.07%!

If the person had regular days or hours holidays would be straight forward.

I have heard the debate on zero hours contracts and not paid too much attention to it, but it suggests that these people do not have the rights of others but if it meant that they didn't get any holiday pay it would contradict all of the above!!

Hate PAYE stuff too!!

FoxAccountancyServices · Expert

Aw thanks so much for explaining that.. makes total sense!

Princess · Senior Member

I do holiday pay for some people on zero hours contracts. the work a few hours each during term time and not during holidays. I just add 12.07 per cent of their hourly rate on to every hour they work. I don't think you are supposed to add it on every month as they are supposed to actually have holidays but since these have school holidays off I can't see any other way of doing it except accruing it and then paying it at the start of each school holiday. They aren't fussed either way so it's easier just to pay it as we go along. Moneysoft does it nicely, calculating the amount for me and adding it onto their payslip.

Count1314 · Senior Member

Thank you......one the client has caught up, I will recommend monthly or quarterly......or change their contracts!

I will need to obtain contracts template (anyone?? biggrin ) first

I suppose with zero hour contracts, the calculation seems the only way.....how can they take holidays??

Wella · Expert

Employees on casual, irregular, or zero hours should accrue holiday hours at the rate of 12.07% of the hours worked.

Paying holiday pay at the same time as the regular pay is paid is a grey area, as the employee is supposed to request the holiday pay, and it is calculated using the last 12 weeks average hourly rate.

This is fine for regular staff but more often than not, an employee may only work for a few weeks and never be seen again (usually students, working the holidays). Certainly the case down, where many work in the leisure industry.

What has been allowed but is not totally approved is the payment in addition to the normal pay but clearly identified as holiday pay. It must not under any circumstances, be added in to the normal pay.

I argue that an employee on non fixed hours, is on holiday the next non working day.

Bill

AG · Newbie

Hello,

one thing that many employers do not consider or are shocked to find out is that in some cases you end up paying more holidays than intended. This is a mistake we made as if you have casual staff on a higher amount of hours you will end up paying more than the 28 days quota. The 12.07% is uncapped which means that if you simply multiply a number of hours it will simply give you a result..

This means that hours that should be paid as overtime are instead paid as holidays, and some casual staff could end up with more holidays that your full time staff. We are trying to work an excel formula that sorts this, but so far hit a blank. In the meantime we are making a quarterly calculation of how many hours holidays an FT would accrue, then compare and subtract if the amount of 12.07*hrs surpasses it.

If anybody in here is handy with Excel in that way and would like to offer a solution, please share!!!

Leger · Master Book-keeper

Hi Alex, welcome to the forum.

Can you tell us a bit about yourself, we ask all newbies. normal sort of stuff as in are you a bookkeeper or accountant (employed or self-employed) and how long in the role, what sort of qualifications have you gained* and with which body, that sort of thing helps us to know a little bit about you and how best to pitch any answers

I disagree with you on the 12.07%. It's a handy calculator for those who work irregular hours, and should come out more or less the same. E.g. someone working 40 hours a week and getting 28 days is the equivalent of 224 hours.

Someone doing 40 hours a week over 46.4 weeks at 12.07% is entitled to 224 hours,

Do you not take overtime into consideration when working out holiday entitlement for a full time worker?

* Can be qualified by experience, some of us are.

VEIS anyone? I have a feeling in my bones.

-- Edited by Leger on Friday 16th of February 2018 05:41:27 PM

AG · Newbie

Hello, I think I just realised that I am not technically allowed here... I am a Business owner and I am merely putting a question across based on unverified advice and general assumptions.

I agree with your counter point, but also it does not answer a question that I think needs answering (unless there is a generic rule which I do not seem to have found,neither my Business peers). Overtime is not generally included in the holiday accruals (at least in my industry, Hospitality), it's just paid at an overtime rate.

If it was to be paid staff on casual hours contract that worked more hours for a reason or another will end up accruing more holidays than our staff on a standard 28 days equivalent allowance? I hope that I mangled to explain myself well and it makes sense.

I might be totally confused, in fact I am, but I reflect a lot of my peers and posts I have seen on the internet. Overtime is just that, and paid a t a higher rate for that matter, it should not be calculated for holidays for the reasons above* (*common sense assumption).

I guess another question would be what do these 28 days 5.6 weeks translate to in terms of hours so that we could benchmark anybody on an hourly contract that goes over the threshold?

With that, I apologise for having posted I realise now that it's just for you guys.

Leger · Master Book-keeper

Hi Alex

No need to apologise.

Paying holiday pay on overtime isn't a choice, the employee has a legal right to receive it. See http://www.acas.org.uk/index.aspx?articleid=4109

Casu · Senior Member

Yes your are right that this site is not for business owners. Stop making general assumptions. Stop taking unverified 'advice' from the equivalent of a mate down the pub, who knows little and talks rubbish. Start looking at the only place to look, ie the Law. get some proper advice from an employment law and payroll specialist who might offer free advice, such as those linked to above. Or stick your hand in your pocket and pay for some, otherwise at some point the Law and HMRC will catch up with you and you will pay a lot in fines and penalties.

AG · Newbie

Wow, Casu...you are so scary, I am literally in tears here..

Now that you have vented your life frustration through a forum, let me remind you that I have been courteous and apologised and my self declared that my belief were based on hearsay and the rest. So I am not sure what point you are trying to make here.

But you are merely a troll, so I won't waste my time with you - instead thank Leger for his/her courteous / normal person reply.

Also, unless I am still completely wrong here, I have seen many a blue chip contracts that state that holiday pay is based on the contracted hours, the rest is overtime. So, I am still not the clearer, now go take some Gaviscon.

-- Edited by AG on Monday 19th of February 2018 01:31:52 PM

Shamus · Forum Moderator & Expert

AG wrote:
Wow, Casu...you are so scary, I am literally in tears here..

Now that you have vented your life frustration through a forum, let me remind you that I have been courteous and apologised and my self declared that my belief were based on hearsay and the rest. So I am not sure what point you are trying to make here.

But you are merely a troll, so I won't waste my time with you - instead thank Leger for his/her courteous / normal person reply.

Also, unless I am still completely wrong here, I have seen many a blue chip contracts that state that holiday pay is based on the contracted hours, the rest is overtime. So, I am still not the clearer, now go take some Gaviscon.

Unacceptable!

My apologies to Casu for having to undergo that personal attack after giving quite valid and constructive advice with just the right amount of inherent warning (as always).

Casu. Up to you. Would you like the poster banned for the above?

Shaun.

Nikole · Senior Member

Princess wrote:
I do holiday pay for some people on zero hours contracts. the work a few hours each during term time and not during holidays. I just add 12.07 per cent of their hourly rate on to every hour they work. I don't think you are supposed to add it on every month as they are supposed to actually have holidays but since these have school holidays off I can't see any other way of doing it except accruing it and then paying it at the start of each school holiday. They aren't fussed either way so it's easier just to pay it as we go along. Moneysoft does it nicely, calculating the amount for me and adding it onto their payslip.

Hi Princess

I process holiday pay for zero hours contracts and we were advised that it is ok to roll up holiday pay into the hourly wage as term time staff only work 39 weeks of the year, therefore have to take a break. Obviously for a non term time worker rolled up pay is a no no. Like you we have staff who prefer the holiday pay each week and others who prefer to accrue the holiday pay pay each term.

pictures · Senior Member

I'm sorry I know others will disagree but if I had received a reply like the one that Casu gave to the OP I would be feeling very upset especially after admitting an error and apologising for using the wrong forum.

I will not add to this discussion any further as I think others have adequately replied but I feel that was a bit of an over-reaction to a genuine enquiry.

pictures · Senior Member

Princess, in my old days of being self employed/running a kids activity I used to pay all casual staff their holiday pay in a lump sum at the end of every term. I was advised by an employment specialist that rolled up holiday pay was not allowed. I had to alter everyone's contracts to reflect this advice.

Nikole · Senior Member

pictures wrote:
Princess, in my old days of being self employed/running a kids activity I used to pay all casual staff their holiday pay in a lump sum at the end of every term. I was advised by an employment specialist that rolled up holiday pay was not allowed. I had to alter everyone's contracts to reflect this advice.

How long ago was this? Reason i ask is that we were also advised by an Employment law specialist that it was ok to roll up.

-- Edited by Nikole on Monday 19th of February 2018 04:03:59 PM

Cheshire · Master Book-keeper

I agree with Shaun. Casu may have said this more forcefully than some, but there was no insult given. Frankly the OP's name calling is totally unacceptable. He has been back on, but made no attempt to apologise, so I for one think the account should be closed down for both the name calling and also given he is a business owner so, as he said himself, he should not be on the site.

He is wrong in his comment included in last sentence at 10.11 and yet again is making assumptions.

The advice to get an employment law/HR etc specialist remains pertinent.

I am unsure why responses are now being given to a post from Princess relating back to 2014, only I surmise that perhaps folk havent spotted the date.

But also, great care needs taking here (for anyone reading this) - the regulatory changes have occurred since that date so the original posts are not relevant to the question at hand from this business owner.

Nikole · Senior Member

I didn't see the original date... Sorry :/

Leger · Master Book-keeper

Cheshire wrote:
But also, great care needs taking here (for anyone reading this) - the regulatory changes have occurred since that date so the original posts are not relevant to the question at hand from this business owner.

Very true Joanne, 2016 I think.

Nikole wrote:
How long ago was this? Reason i ask is that we were also advised by an Employment law specialist that it was ok to roll up.
Hi Nicola, didn't we have a big discussion about this 2-3 years ago. I remember saying that rolled up pay wasn't permissible and someone (possibly Joanne) saying to seek employment law advice. If the advice has come back saying rolled up pay is ok then I strongly disagree with it. I just hope the client has it in writing if it's ever queried.

Nikole · Senior Member

Leger wrote:
Cheshire wrote:
But also, great care needs taking here (for anyone reading this) - the regulatory changes have occurred since that date so the original posts are not relevant to the question at hand from this business owner.
Very true Joanne, 2016 I think.

Nikole wrote:
How long ago was this? Reason i ask is that we were also advised by an Employment law specialist that it was ok to roll up.
Hi Nicola, didn't we have a big discussion about this 2-3 years ago. I remember saying that rolled up pay wasn't permissible and someone (possibly Joanne) saying to seek employment law advice. If the advice has come back saying rolled up pay is ok then I strongly disagree with it. I just hope the client has it in writing if it's ever queried.

Hi John,

We quite possible did have a conversation but i cant say for sure. Quite a large well known company my advised my Client it was ok for tt workers on a zero hour contract to have their pay rolled up. I think the reason was that with tt workers they are only contracted to work 3/4 of the year so in effect they have no choice but to have a break from working whilst employed by you.

Casu · Senior Member

Shamus wrote:
AG wrote:
Wow, Casu...you are so scary, I am literally in tears here..

Now that you have vented your life frustration through a forum, let me remind you that I have been courteous and apologised and my self declared that my belief were based on hearsay and the rest. So I am not sure what point you are trying to make here.

But you are merely a troll, so I won't waste my time with you - instead thank Leger for his/her courteous / normal person reply.

Also, unless I am still completely wrong here, I have seen many a blue chip contracts that state that holiday pay is based on the contracted hours, the rest is overtime. So, I am still not the clearer, now go take some Gaviscon.
Unacceptable!
My apologies to Casu for having to undergo that personal attack after giving quite valid and constructive advice with just the right amount of inherent warning (as always).
Casu. Up to you. Would you like the poster banned for the above?
Shaun.

Thanks Shaun.

go for it.

Shamus · Forum Moderator & Expert

Casu wrote:
Shamus wrote:
AG wrote:
Wow, Casu...you are so scary, I am literally in tears here..

Now that you have vented your life frustration through a forum, let me remind you that I have been courteous and apologised and my self declared that my belief were based on hearsay and the rest. So I am not sure what point you are trying to make here.

But you are merely a troll, so I won't waste my time with you - instead thank Leger for his/her courteous / normal person reply.

Also, unless I am still completely wrong here, I have seen many a blue chip contracts that state that holiday pay is based on the contracted hours, the rest is overtime. So, I am still not the clearer, now go take some Gaviscon.
Unacceptable!
My apologies to Casu for having to undergo that personal attack after giving quite valid and constructive advice with just the right amount of inherent warning (as always).
Casu. Up to you. Would you like the poster banned for the above?
Shaun.
Thanks Shaun.
go for it.

Done. biggrin