Will Your Contracts of Employment Still be Legal in April? (Part 1)
Updated: Dec 2, 2019
April is traditionally the time that changes to employment legislation become effective and April 2020 will be no different with a couple of significant changes that HR Managers and small business owners may want to consider now and, in particular, how you will implement these changes to the best advantage of your business. I will cover both of these issues over my next two blogs.
Calculating Holiday Pay
If you pay your employees the same amount every week or month then this change won't affect you. However, when you have employees who work different hours each pay period or who receive a shift allowance, overtime or certain types of commission payments this is for you.
Currently, employers are expected to calculate the average of the previous 12 weeks' pay when working out holiday pay but this has caused problems because the European Court of Justice (ECJ) holds that an employee must receive their "normal remuneration" whilst on holiday and using 12 weeks as the reference period doesn't take into consideration fluctuations that may occur during the year,
Therefore,from 6 April 2020, employers will be expected to change the reference period from 12 weeks to 52 weeks.
If you will be affected by this and if your holiday year starts before April then you should start to consider when to implement the change. For example, the retail and hospitality sectors typically work longer hours in the Christmas period and changing to the new rules in January could have repercussions on holiday pay.
If your financial year ends after 6 April, you may want to limit the amount of holiday employees can carry over as he value of any accrued holiday will increase,
If you would like an HR Consultant to look at this with you please get in touch and remember Bear HR offers a FREE No Obligation HR Health Check to any potential new client.