Holiday Pay: more changes on the way from April 2020

17th September 2019

From April 2020, the holiday pay reference period will be lengthened from 12 to 52 weeks.

No guidance has yet been published, although employers will need to know how the change will work in practice. 

New regulations take effect from April 2020 to ensure workers in seasonal work or with abnormal working hours receive the paid holiday to which they are entitled. 

If a worker has been employed by their employer for at least 52 weeks, the holiday reference period is expanded from 12 weeks to 52 weeks. Where the employment has been for less than 52 weeks, the holiday reference period is the number of weeks for which the worker has been employed. 

Practical implications

In the absence of clear guidance, employers need to know if the calculation will be a straightforward year regardless of how many weeks in that year a worker has actually been paid, or will the employer have to keep trawling back through the weeks that include pay to reach 52 weeks? 

The Department for Business, Energy and Industrial Strategy (BEIS) says the intention is that the 52-week reference period will work in much the same way as the 12-week reference period does. Employers would have to count back over the last 52 weeks that a worker worked and received pay, excluding weeks where the worker did not work or receive pay. 

Where there are fewer than 52 weeks of pay information, the employer would have to include as many whole weeks of pay information as are available. 

The regulations ensure that there is no need to refer back any further than 104 weeks to find relevant weeks of pay. You will use the number of weeks worked within that 104-week period, even if it is less than 52. 

No account needs to be taken of weeks preceding the 104 weeks before the beginning of the period of leave. 

Further guidance from BEIS is awaited.

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