I'm beginning to have doubts on whether I have calculated the holiday pay correctly for an employee of a client.
Their basic week would be 37½ hours. Occasionally they work 35 hours and more often they will work more than the 37½ hours. I have been taking the average of the last 12 weeks and working out their holiday pay on that.
There was a two week spell where they were off sick and received SSP. Because of this their 12 week average fell below 37½ hours (by value). This has happened twice now. A few weeks ago the difference was ~£46 and last week it was ~£12.
Should I have paid the 37½ hours or was what I did acceptable? Given the amounts involved I should have realised and suggested to the client paying the 37½ anyway.
__________________
Never buy black socks from a normal shop. They shaft you every time.
Just some quotes in hope of helping. Not sure if it's what you're looking for?
From ACAS: For workers with no normal working hours - If a worker has no normal working hours then their holiday pay would still be a week's normal remuneration but the week's pay is usually calculated by working out the average pay received over the previous 12 weeks in which they were paid.
From gov.uk: To calculate average hourly rate, only the hours worked and how much was paid for them should be counted. Take the average rate over the last 12 weeks. If no pay was paid in any week, count back a further week, so that the rate is based on 12 weeks in which pay was paid.
There should be a 1 size fits all method of calculating holiday pay for small firms........ an average of the past 12 weeks going back further if someone has been off sick. Imagine someone with regular hours because they've been there years getting less than a casual worker because there has been a lot of overtime lately. If this gov.uk link is the law as it stands then it's flippin unhelpful :-
"Holiday pay must correspond to normal remuneration, which is what is normally received by a worker including "non-guaranteed" overtime, but only for the first four weeks of statutory leave
Thanks. I think I'll suggest just paying the extra up to 37½ hours. "If no pay was paid in any week" - well Sage Payroll counts SSP in its 12 week average calculation. When the "rules" are as vague as they are I'm having to look at it from employer and employee point of view.
__________________
Never buy black socks from a normal shop. They shaft you every time.
I would have done the same as you did, on the basis that SS"Pay" was his pay for that week. Maybe it would be different if he had no pay that week due to zero hours contract or something. Also, I would imagine that Sage would be totally compliant with their interpretation of the rules and if Sage Payroll is calculating it that way, then that's how you could justify it?
