Holiday policy

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What's a holiday policy and when do you need it?

You should have a holiday policy in place for your employees and workers.

By law, employers must give employees details relating to their holiday entitlement and holiday pay.

Full-time workers, those working 5 days or more a week, are entitled to 5.6 weeks (28 days) of paid leave each year. (These 28 days can include bank holidays.) There is no extra statutory entitlement for workers doing a 6-day week.

Part-time workers are entitled to 5.6 weeks of paid holiday leave too, but it would work as less than 28 days, pro-rata, because they work fewer hours each week. (So, for example, someone working 3 days a week would in fact be entitled to a minimum of 16.8 days of paid holiday.)

Employees must also receive their 'normal remuneration' during periods of holiday (technically, this only applies to the 4 weeks’ holiday mandated by the Working Time Directive (Regulation 13), but some employers will choose to treat the additionally legally required 1.6 weeks’ leave (under Regulation13A) in the same way).

This means that payments such as commission, overtime and other payments intrinsically linked to performance will have to be included within holiday pay calculations, if they are normally received (it is permissible to look back at the previous 12 weeks to ascertain what is normally received).

The government has a really handy tool for working out part-time workers' holiday entitlements. Helpfully, it can also be used to calculate the entitlement of those working less regular hours/shifts, and for parts of the year, not a full year.

Our experts recommend that you do not give this policy contractual status in any employment contract that you put in place, but that you do reference it in that contract, make clear that the employee is expected to comply with the policy and that you have the right to update or revise it, in your discretion and when you want to.

This template includes the statutory requirements, as well as optional elements for you to consider.