Working Time Regulations

4. Holidays and Leave

You are obliged by law to give everyone who works for you paid annual leave - unless they are genuinely self-employed.

4.1 The legal minimum for annual leave is 5.6 weeks per year. This is worked out on a pro rata basis for part-time employees (eg 16.8 days per year for an employee who works three days a week).

• You cannot replace the holiday entitlement with pay in lieu, except when employment comes to an end.
• Payment in lieu of holiday will not be permitted for any statutory holiday (28 days for full-time workers).

4.2 Workers will normally be paid for a holiday at the time it is taken. It is no longer possible to pay 'rolled up holiday pay' (ie weekly pay which includes a payment equal to one week's holiday pay accrual).

• You should renegotiate any contracts that involve rolled-up holiday pay so that future holidays are paid at the time the leave is taken.

4.3 Workers are entitled to take leave from the start of their employment.

• You cannot impose a 'service requirement'. For example, you cannot make new workers wait six months before they can use any of their holiday entitlement.
• Leave must accrue at one-twelfth of the annual entitlement for each month worked, rounded to the nearest half day.

4.4 Part-time workers and most fixed-term employees have similar entitlements to paid annual leave.

• Part-time workers' entitlement is calculated pro rata. For example, if full-time, five-days-per-week workers get 28 days' paid holiday a year, part-timers doing the equivalent of two days' work a week will be entitled to 11.2 days' leave.
• Most fixed-term employees are entitled to no less favourable treatment. The exceptions include apprentices, agency workers, work experience placements of less than one year and people on government training schemes.

4.5 You can exercise some control over the timing of employees' holidays.

• You can require them to take some holiday at specified times. For example, if you close your whole factory over one or two weeks of the year.
• You can require them not to take holiday at some specified times - for example, at or around the time of your industry's trade show.
• You can specify how much holiday can be taken at any one time. You must give appropriate notice ahead of each week you require people to take their holiday.

4.6 You need a system for deciding on holiday dates.

• Many businesses work on a 'first come, first served' basis. Others allow senior people, or those with longer service, to choose their dates first.
• Specify that you need reasonable notice on holiday dates - say, one month.
• You might also state that no more than one or two staff in any one department should be off at the same time.

4.7 You need a policy on holiday rollovers.

• For example, you might specify that no more than one weeks' unused holiday can be carried into the following year.