What's Changing?Further to the previous release note for Additional Holiday Pay and in response to questions we have received please find below some supplementary information about these changes.
Release Date: 21-Jan-2016
Reason for the ChangeThere have been a number of court judgements made over the last year in relation to the calculation of holiday pay. The judgements specifically refer to those employees whose pay fluctuates between pay periods due to additional payments such as overtime or commission.
There continues to be cases around the calculation of holiday bought through the courts and these may or may not further impact an Employer’s responsibility in this respect.
The Advisory, Conciliation and Arbitration Service (ACAS) provide advice on the subject of holiday pay and these rulings that you may find useful: ACAS Advice on Holiday Pay*.
Note: The information held on this website is the property of ACAS and is constantly being updated; please contact them for any questions about the content.
Customers AffectedAll customers that use the HR and Payroll Module.
Release NotesUpon release of the Additional Holiday Pay (AHP) function on 21st January 2016 you will need to configure the system (as per previous article) before the calculations effect your system.
Once you have configured your system (by selecting the relevant payment types that should be included in the calculation etc.) the calculations will apply to all holidays booked by employees on or after the 1st April 2016.
- An employee takes a holiday on 22nd March 2016 - there will be no AHP calculation applied.
- An employee takes a holiday on 4th April 2016 – AHP will be calculated in the pay period in which falls (e.g. the weekly pay period 4th – 10th April 2016) as per calculation example in the previous release note.
- An employee takes 4 days holiday from 30th March – 2nd April 2016 – AHP would not be calculated for the 30th and 31st March but the calculation would apply for the 1st and 2nd April 2016.
Why from 1st April 2016 and not immediately on release or from a date in the past?
- It’s the beginning of a month providing a clear starting point to be able to explain to employees why their pay may be affected.
- It is a common date from which a new holiday year will start (although this may not apply to all customers).
- The time between the release date of 21st January and 1st April 2016 allows time to configure your system.
- If you are manually calculating these Additional Holiday Pay adjustments it gives you time to update your processes and stop applying manual calculations at the correct time.
- You can consider the financial impact and be prepared to absorb potential (if not calculating manually) additional costs from 1st April 2016.
- If applied from a date in the past the calculation would be applied to all holidays booked by employees on or after that date (e.g. 1st January 2016) resulting in back dated payments due for Additional Holiday Pay. These would all be paid (if applicable) when processing the first pay run after configuration.