13 C
Manchester
Tuesday, December 9, 2025
BusinessRolled-up holiday pay: What it means for employers

Rolled-up holiday pay: What it means for employers

New regulations unveiled this week could lead to an average £1,000 increase in the annual earnings of temporary and contract workers.

Under the new rules, individuals with irregular or zero working hours, or those employed seasonally, will now be permitted to receive ‘rolled-up’ holiday pay.

This method involves incorporating holiday pay into their standard wages rather than providing a separate payment during their time off. Consequently, workers will receive a slightly higher hourly rate, and businesses will no longer need to calculate holiday entitlement separately.

The current prohibition on rolled-up holiday pay stems from a 2006 European Court ruling expressing concerns that workers might be disincentivised to take leave, as they could earn more by continuing to work.

While the government initially proposed extending rolled-up holiday pay to all workers, it has decided against it, deeming it less advantageous for those with regular hours.

New year regulations

These regulations, effective from January 1, 2024, mark a significant shift in holiday laws that will impact numerous employers. The changes also introduce a new method for calculating holiday entitlement.

The swift implementation follows the government’s release of two sets of proposals earlier this year aimed at reforming holiday rights. The government has now responded and provided draft regulations.

Key features of the new Employment Rights Regulations 2023

  1. Retaining two distinct ‘pots’ of annual leave with different pay rates (4 weeks at the normal rate of pay and 1.6 weeks at the basic rate of pay).
  2. Introducing rolled-up holiday pay for irregular hour workers and part-year workers, encompassing certain agency workers.
  3. Plans to legislate an accrual method, calculating entitlement at 12.07% of hours worked in a pay period for irregular hour workers and part-year workers from the first year of employment onward.
  4. Simplifying Transfer of Undertakings (Protection of Employment) regulations and reducing administrative burdens for small businesses.

Tania Bowers, the global public policy director at The Association of Professional Staffing Companies (APSCo), expressed satisfaction with the inclusion of rolled-up holiday pay in the regulations, emphasising its necessity for protecting agency and umbrella workers.

She urged recruiters and umbrella companies to communicate the importance of workers taking their owed holiday or pay in accordance with the Working Time Regulations.

Helen Greaney
Helen Greaney
I'm a journalist with more than 18 years' experience on local, regional and national newspapers, as well as PR and digital marketing. Crime and the courts is my specialist area but I'm also keen to hear your stories concerning Manchester and the greater North West region.
Latest

Employee gifting in 2025: North West firms pivot to quality over quantity

North West businesses are fundamentally rethinking their approach to end-of-year employee recognition as budget pressures reshape traditional corporate gifting. The shift represents more than...

Europe’s paper decline highlights how digital workflows are reshaping modern business

New international data points to a major shift in how organisations across Europe are operating, with digital workflows rapidly replacing traditional paper-based processes. The...

Choosing the right scissor lift table for your industrial needs in England

Selecting the appropriate scissor lift table is crucial for enhancing safety, efficiency, and ergonomics in industrial environments across England. Whether you operate in manufacturing, warehousing, or...

Charge-M8 and Nemiah Partner to Develop cosmOS BMS Integration for AI-Enhanced EV Infrastructure Management

Charge-M8 (https://charge-m8.com) has entered into a strategic collaboration with Nemiah (https://nemiah.uk) to create a bespoke adaptation of the cosmOS platform (https://cosmos.energy) for Charge-M8 clients...
Subscribe to our newsletter
Business Manchester will use the information you provide on this form to be in touch with you and to provide updates and marketing.
Don't miss

Choosing the right scissor lift table for your industrial needs in England

Selecting the appropriate scissor lift table is crucial for enhancing safety, efficiency, and ergonomics in industrial environments across England. Whether you operate in manufacturing, warehousing, or...

Blyth’s Ian Rutherford Releases Powerful Life Story in New Autobiography “Mission Accomplished: A Boy from Blyth”

“Everybody has the power to shape their own destiny. I think it just comes down to who wants it the most.” Entrepreneur and former close-protection...

Christmas Gift Guide from Plates4Less Encourages Shoppers to Choose Presents That Last

Plates4Less has introduced its latest Christmas Gift Guide, aimed at helping consumers pick personalised presents with lasting value. Highlighted within the guide is the...

Europe’s paper decline highlights how digital workflows are reshaping modern business

New international data points to a major shift in how organisations across Europe are operating, with digital workflows rapidly replacing traditional paper-based processes. The...

More News

Employee gifting in 2025: North West firms pivot to quality over quantity

North West businesses are fundamentally rethinking their approach to end-of-year employee recognition as budget pressures reshape traditional corporate gifting. The shift represents more than...

Europe’s paper decline highlights how digital workflows are reshaping modern business

New international data points to a major shift in how organisations across Europe are operating, with digital workflows rapidly replacing traditional paper-based processes. The...

Evostock.com reviews practical tips for trading index CFDs successfully

In this article, Evostock.com reviews practical tips for trading index CFDs successfully. Contracts for Difference (CFDs) provide a unique opportunity for traders to speculate...