What holiday must you offer employees in a small business?

What holiday must you offer employees in a small business?

The sun is out, shorts are on and the sunscreen has been applied; summer is here. And with it comes the stampede of employees who rush out the door with suitcase in hand, having booked time off to enjoy the heat. Particularly for small businesses however, an outpouring of employees during the hottest months of the year presents a big problem. Whether summer is your busiest month, or your yearly slump, having a smaller workforce will nevertheless impact your team’s productivity, but taking time off is a legal requirement. In this blog we will explore how much leave employees are entitled to.

How many days of holiday are full-time employees entitled to?

Most full-time workers are entitled to a statutory paid holiday entitlement of 28 days, which is equivalent to 5.6 weeks of paid holiday a year. This entitlement is also known as annual leave. A full-time employee in this context is someone who works 5 days a week. The statutory entitlement is limited to 28 days, so an individual who works 6 days a week, is still only entitled to the 28 day limit.

An employer has the right to include bank holidays as part of their statutory leave policy, which in the UK is eight days, meaning an employee is typically offered four weeks of paid holiday a year (or 20 days). Bank holidays and public holidays do not however have to be given as paid leave.

There is no legal notice period that employees must give in the request for annual leave, and this period may differ from employer to employer. Generally, this period is at least twice as long as the amount of leave being requested. An employer can refuse to give leave during at a certain time, but cannot refuse to let an employee take all of their leave. They also cannot offer to pay employees instead of letting them take holiday.

By law, workers have the right to: get paid for their annual leave, request holiday at the same time as being off sick, and build up holiday entitlement whilst on maternity/paternity/adoption leave or whilst being off sick. These rights must be provided by the respective employer.

How many days of holiday are part-time employees entitled to?

Many employees are not full-time workers, and offering them holiday can be a particularly grey area. It should be noted that the full 5.6 weeks of leave applies to agency workers, those who work irregular hours and those who are on zero-hours contracts.

Part-time workers will receive less than the 28 day limit, but are offered the equivalent of 5.6 weeks of however many days they work in a week. For example, working four days a week means you are entitled to 22.4 days’ leave. For those who do not work regular hours, like shift workers or those who only work during term time, these employees are entitled to paid time off for every hour they work.

How much do you have to pay for annual leave?

Pay for annual leave is a blanket rule for all employers. Employees are entitled to a week’s pay for each week of statutory leave taken. This is calculated by literally dividing the amount of an employees’ monthly pay by how many hours they worked during that month, to get an average hourly rate. Then multiplying this average figure by the number of hours they work in a week to give you the sum of their weekly pay.

Informing employees of your holiday policy

The holiday policy for an employee will differ from company to company. The employee should however be informed of the dates of their statutory leave as soon as they begin work. This is typically outlined in the employee’s contract. An employer for example can choose to offer more than the legal minimum of 28 days, and other rules can be applied to the extra leave – like being part of the company for a certain time. If a worker begins partway through the holiday year, they will only be entitled to part of their leave package, equivalent to the rest of the holiday period. The contract should also state how many days of leave an employee can carry over to the next year. In receiving 28 days holiday, you can carry over a maximum of eight days to the next holiday year, but there are exceptions to this rule if for some reason you were unable to take your holiday.

Laying out your holiday policy should be an important consideration for employers to ensure they are both meeting their legal requirements and the needs of their employees. It could be something that you touch on in your business plan. If you would like help with putting together your business plan, get in touch today! Contact us online using the form on the right or call 01604 420 420.

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