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Holiday Pay Audits

How should employers calculate statutory holiday pay? Until recent years, it was generally accepted that holiday pay could be based on basic pay only.

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However decisions from the European Court of Justice and UK courts have thrown this into question, confirming, for example, that EU Law requires non-guaranteed overtime to be included in the calculation.  A number of cases are currently proceeding through the UK courts relating to commission and voluntary overtime.

Employers concerned about these issues should consider their current method of calculating holiday pay, their likely financial exposure to any retrospective and future claims and ways in which they might wish to respond to any future changes in the law. Lewis Silkin’s holiday pay audit service will review and report on these areas for you, drawing on our expertise in this tricky area of law and considerable experience in advising clients on holiday pay issues.

Related items

Voluntary overtime must be included in holiday pay if sufficiently regular and settled

12 June 2019

The Court of Appeal (“CA”) has confirmed that the Working Time Directive (“WTD”) requires voluntary overtime to be included in holiday pay if it is sufficiently regular and settled to amount to normal remuneration. On the wording of their NHS contracts, the claimants were also entitled to have both compulsory and voluntary overtime included in their holiday pay.

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