We were interested to read about a recent case in the Court of Appeal which ruled that employers should ensure that any regular overtime payments are included in calculations in the first 20 days of any holiday payments made.
So if your employee regularly earns £100 per week in overtime on top of their basic pay, you may need to factor this into the first four weeks of their holiday pay (any holiday pay thereafter can revert to their contracted hours).
We’ve been aware of this change in employment law for a while now – in 2017 the Employment Appeal Tribunal made a similar ruling when considering a case where employees were regularly working overtime, even though it was undertaken voluntarily.
However, it seems that many employers are unaware of this change. If you have staff who regularly work more than their contracted hours, you may need to find out whether you need to take this into account when calculating their holiday pay.