Hi Leger

The employees are term time only workers and only work 3/4 of the year therefore their holiday pay is incorporated into their day rate. Employees have the option to either receive their holiday pay in their daily rate or have an amount they desire held back. Definately all above board what we are doing (Spent many hours on the telephone to an employment law firm) to clarify all of this.

Hello John

Yes their daily rate includes holiday pay. It is calculated using the 12.07% method as a lot of the workers dont work set days. So it has been based on an accrual basis.

Up until now all employees have not requested any pay to be held back. All employees work 39 weeks of the year and because they do not have the option to work the full 52 weeks holiday pay can be incorporated into their pay. If they decided to work for another company when the schools shut down that is at their discretion.

Forgot to add the workers are agency staff.

They are all teachers. A few of my friends work in agencies that supply teachers ect and they all work on the same principle.

Sorry! Didnt mean it to come across in a bad way :)

Nikole wrote:

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Forgot to add the workers are agency staff.

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 Hi Nikole, the rules changed around 7/8 years ago. What the employer/agency needs to do is calculate the holiday due (in your case 4 weeks and 1 day) and add this to the agreed contract.  The worker is then paid over 43.2 weeks in total, rather than 39 weeks. eg You have agreed to pay the worker £400 per week + £48.28 holiday pay.   You pay the worker £400 a week  for the 43.2 weeks instead. 

https://www.admin.ox.ac.uk/personnel/during/leave/holiday/calculation/term/  

https://www.gov.uk/holiday-entitlement-rights/holiday-pay-the-basics  for rolled up holiday pay.

I don't know who the employment law service is, but they are definitely wrong on this

Cheshire wrote:

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I thought it was longer ago than that John. I couldve sworn I had an old ACAS document in my favourites but I cant find it now, sorry, however Johns first link shows it just as well.

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 I thought it was 2008 but it was 2007.  Declared illegal by the EU in 2006 and a year later implemented by the UK.  I remember it because  I started working for an agency in 2007 and they paid extra to cover holiday entitlement, but then they had to stop doing it and allow you holiday instead.  This is a good brief on it which will help Nikole, and it's from a respected employment law specialist.

http://sjbealehrconsult.co.uk/blog/tips-on-rolled-up-holiday-pay/

The last paragraph is very interesting, and I wonder if it's akin to what Nikole's advisers are saying.  Basically it looks like rolled up pay but isn't.  I've attached a screenshot of a payslip and calculation sheet I produced last year using this method.  When the employee wants a holiday they don't receive their normal pay they use some of this "rolled up" pay instead.  

Nikole, which software are you using?  I use Moneysoft but other software may do something similar.  Once I know I can hopefully help you with the correct way to do it through the payroll

I havent been able to locate the email that the employment law specialist sent me. Im going to call them again tomorrow to resend the email.

@ John - See attached payslip which shows the holiday fund. I am using Sage.

Re-reading the thread you said earlier that the holiday pay is included in the hourly rate, so my previous post may be wrong.  That's the reason I was trying to establish the gross figure without taking this holiday pay into account.

Looking at your payslip you have 60 hours at £4.50, is this correct?  If so is the correct hourly rate £4.01?  (£4.01 + 12.07% comes to just short of £4.50)