Zero Hour Contract Holiday Pay Entitlements – UK Law

Zero hour contract holiday pay can be a complex subject. While it’s easy to determine how much to pay regular employees, it can be tricky to determine holiday pay for zero hour workers. The zero hours contract holiday pay entitlement can be an area of confusion. Workers are sometimes told they have no right to holiday pay. However, this is incorrect, the right to paid holiday is a statutory requirement under UK law.

people on a beach enjoying a holiday from work
Zero hour contract workers have the right to holiday pay.

This article will provide you with the details regarding this concern, and help you understand worker rights in this area.


Are Zero Hours Contract Workers Entitled To Holiday Pay?

Employees on zero hours contracts have the right to take a statutory minimum of 5.6 weeks holiday each year, subject to certain conditions being met. These conditions apply to all zero hours workers.

Although zero hours workers don’t work the same hours every week, they are entitled to holiday pay, just like permanent workers. This calculation is known as the statutory minimum holiday entitlement. Of course, there are some exceptions to these rules. However, if an employee is working for the same employer without knowing their work rota more than 12 weeks ahead of time, they are entitled to holiday pay.


How Much Paid Holiday Leave Are They Entitled To?

Zero hours workers are entitled to 5.6 weeks of paid holiday leave per year. This means they are entitled to 28 days of paid holiday leave during the working year. It’s at the employer’s discretion whether they want to include bank holidays.

Based on this, zero hour workers are also legally entitled to a week’s pay for each week of statutory leave they take. Of course, these rules apply as long as these workers are working. The legal rights of zero hour workers are not the same as the legal rights of other employees. The specific pay and entitlement zero hour workers can get is calculated according to the number of hours they work.


How To Calculate Zero Hours Contract Holiday Entitlement

Before calculating holiday pay, the employer must first determine how many days of holiday pay the worker is entitled to. Simply put, employees earn holidays based on the number of hours they work.

The statutory holiday entitlement equals 12.07% of the total hours worked in a year. This means that you will need to look at your zero hours contracts and compare them with your working pattern. You should calculate this percentage before you take any more leave. Then you can ensure that you are receiving the right amount of holiday pay.

For example: An employee works 12 hour weeks over 52 weeks with one week off. They will then have 1,040 hours worked in addition to their required rest time. Twelve per cent of this sum is 114.08 hours.


How to calculate zero hours holiday pay

Once you’ve worked out your holiday entitlement, it’s time to calculate how much pay you will get for your days of holiday leave. The most important thing to remember when calculating holiday entitlement is that you should be using your average pay over the previous 12 weeks.

To calculate this, add up the total amount paid over the last 12 weeks, then divide the total by 12. This will give you a weekly average. For example, if this average worked out at £300, you would be entitled to £300 for every week of holiday leave you take.


Penalties For Not Giving Zero Hour Contract Workers Holiday Pay

If an employer is caught not giving their staff the correct holiday pay, they will face financial penalties. In addition, employees could take their employers to the employment tribunal.

If the tribunal decides that the company has broken the law, they can force them to pay compensation. This will cover any loss or inconvenience employees have suffered. On top of this, they may order employers to pay fines if there are any breaches of employment law. These fines could run into five figures so understanding the law is vital for employers.

It’s illegal for an employer to treat their staff differently based on whether they work full or part time hours. So if an employer has workers who work regular patterns, they might want to consider changing their zero hours contracts to full time. This will simplify calculating the holiday pay entitlement, avoiding the need to calculate the average hourly pay.

There may also be other penalties, such as workers being awarded a higher sum in compensation if an employer makes them redundant. At the same time, there is also the chance that a business will be closed for an investigation. Therefore, it’s better to follow the rules in place to avoid these kinds of issues.


How Do Zero Hours Contract Workers Request Holiday?

Zero hours contract workers request holiday entitlement in the same way that other staff members request their paid leave.

Employees should notify their employer if they are planning on taking holiday leave   this is known as a notice of intent. Employers can refuse to grant annual leave. However, they must do so with a counter notice, and within a reasonable amount of time.

Employers can insist that a zero hours worker, or any employee, takes part of their 5.6 weeks leave at a set time. For example, if the business will be closed on a given week, perhaps over Christmas, this can be classed as annual leave.

Our other in-depth guide looks at if your employer can dictate when you take your holidays.

The above is the basic process of requesting holiday. However, employers should also remember that even if their zero hours staff decline to take their leave or are unavailable for as long as agreed, they must still pay them the same amount of money. This is so that they are not at a financial disadvantage if an employer has asked them to take time off.


FAQs

Can my employer refuse to pay me holiday pay?

Holiday pay on a zero hours contract is a statutory right under UK law. Employers cannot refuse to pay holiday pay. Should they try to claim workers on a zero hour contract are not entitled to paid holidays, they could be taken to an employment tribunal.

Workers on a zero hour contract are entitled to 5.6 weeks paid holiday a year, which is the same as employees on permanent contracts.

Should my holiday pay be the same as my usual pay?

Holiday pay on a zero hour contract should be based on the average hours worked over the last 52 weeks. This should mean your pay reflects your usual working hours. If you have worked for less than 52 weeks, the holiday pay should be based on the average of the number of weeks worked.

If there have been weeks where you did not work, these should be excluded from the calculation. Payroll staff should count back another week so the holiday pay calculation is based on 52 weeks of pay. A maximum of 104 weeks can be used to find the average.

Further Information

You can use the government zero hours contract holiday pay calculator to help you work out entitlements.

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