Holiday Pay Rules for Part-Timers: What Employers Need to Know

19/09/2023 01:19 PM

If you are an employer who hires part-time workers, you may be wondering how to handle holiday pay for them. Do you have to pay them the same as full-time employees? Are there any legal requirements or practices to follow? How can you ensure that your part-time staff are happy and engaged during the holiday season?

In this blog post, we will answer these questions and more. We will explain what part-time employees are, how holiday pay works for them, and what benefits they bring to your business. We will also share some tips on how to maximise their engagement and productivity.

By the end of this blog, you will have a better understanding of HR compliance for small businesses when it comes to part-time workers and holiday pay.

Part-Time Employees and Holiday Pay

Definition

A part-time employee is someone who works less than the normal or full-time hours for their role. The definition of normal or full-time hours may vary depending on the industry, the contract, or the employer's policy. However, a common benchmark is 35 hours per week.

Legal Considerations

According to the UK government, part-time workers have the same employment rights as full-time workers, including the right to holiday pay. This means that they are entitled to a minimum of 5.6 weeks of paid holiday per year, pro rata to their working hours.

For example, if a part-time worker works 20 hours per week, they are entitled to 112 hours of paid holiday per year (20 x 5.6).

To calculate the holiday pay for a part-time worker, you need to multiply their hourly rate by their holiday entitlement. For example, if a part-time worker earns £10 per hour and has 112 hours of holiday entitlement per year, their holiday pay would be £1,120 per year (£10 x 112).

However, there are some exceptions to this rule. For instance, if a part-time worker has irregular hours, such as zero-hour contracts or casual work, you need to use a different method to calculate their holiday pay.

In this case, you need to use the 12-week reference period method, which involves taking the average pay and hours worked over the last 12 weeks before the holiday.

Another exception is if a part-time worker has fixed or regular hours but their pay varies depending on factors such as commission, bonuses, or overtime. In this case, you need to use the week's pay method, which involves taking the average pay over the last 52 weeks before the holiday.

Case Studies

Here are some real-life case studies that illustrate the importance of holiday pay rules for part-time workers:

The Harpur Trust v Brazel

The Supreme Court ruled that workers or employees on permanent contracts who only work for part of the year are entitled to 5.6 weeks paid holiday per year, just like workers or employees who work all year. This is a minimum entitlement that is not required to be (and under UK law must not be) pro-rated to be proportional to that of a full-time worker.

Mrs. Brazel, a visiting music teacher working during “term-time” only, was initially paid 5.6 weeks of holiday pay by calculating her average week’s pay in accordance with section 224 of the Employment Rights Act 1996 (ERA) and then multiplying that by 5.6.

However, in September 2011, the Trust changed its calculation method and calculated how many hours Mrs. Brazel worked at the end of each term, took 12.07% of that figure, and then paid her hourly rate for that number of hours as holiday pay.

Supreme Court ruling on part-year workers

The Supreme Court has ruled that employees who only work for part of the year, such as term-time workers, are entitled to the same holiday pay as colleagues working all year. This judgment will have significant financial repercussions for employers with people working part of the year.

These cases highlight the importance of understanding and correctly implementing holiday pay rules for part-time employees.

Without adhering to the proper legal regulation laid out, there will be dire consequences for the employer and the company. Thus, it is vital for all businesses, be it big or small, to adhere to the legal regulations in their country and treat their part-time employers fairly.

Further Perks of Part-Time Employment

As an employer, you may think that hiring part-time workers is only beneficial for them, as they can enjoy more flexibility and work-life balance. However, there are also many advantages for you as well.

Flexibility

Hiring part-time workers can give you more flexibility in managing your workforce and meeting your business needs. You can adjust your staffing levels according to seasonal or cyclical demand, reduce your overhead costs, and fill skills gaps or cover absences more easily.

Cost-Effectiveness

Hiring part-time workers can also help you save money on labor costs, as you only pay them for the hours they work. You may also save on other expenses such as training, benefits, taxes, and insurance.

Diverse Skill Sets

Hiring part-time workers can also enrich your talent pool and bring in diverse skill sets, perspectives, and experiences. You can access a wider range of candidates, such as students, parents, retirees, or freelancers, who may have valuable qualifications, knowledge, or expertise that can benefit your business.

Increased Productivity

A study by the IESE Business School found that a 10 percentage point increase in the proportion of part-time workers in a firm is associated with a 2% increase in firm-level labor productivity.

This is because part-time workers are often more motivated and focused, as they are working fewer hours and have more time to devote to their work. They are also less likely to be stressed or burned out, which can lead to increased productivity.

Strategies for Maximising Part-Timer Engagement

However, hiring part-time workers is not enough to ensure their success and happiness. You also need to implement some strategies to maximize their engagement and integration with your business.

Training and Development

One of the key strategies is to provide adequate training and development opportunities for your part-time workers. You need to ensure that they have the necessary skills, knowledge, and tools to perform their tasks effectively and efficiently. You also need to offer them regular feedback, coaching, and mentoring to help them grow and improve.

Recognition and Reward

Another important strategy is to recognize and reward your part-time workers for their contributions and achievements. You need to show them that you appreciate their efforts and value their work. You can do this by giving them praise, incentives, bonuses, or promotions. You can also involve them in decision-making processes and solicit their opinions and suggestions.

Communication

A final essential strategy is to maintain clear and frequent communication with your part-time workers. You need to keep them informed of your goals, expectations, and policies. You also need to foster a sense of belonging and teamwork among them and your full-time staff. You can do this by creating a positive and inclusive culture, organizing social events, or facilitating collaboration platforms.

Fair Pay for workers with Aniday

In conclusion, holiday pay for part-time workers is a complex but important topic that you need to understand as an employer. By following the legal requirements and best practices for holiday pay, you can ensure that your part-time staff are fairly compensated and satisfied with their work. By implementing strategies for maximizing part-timer engagement, you can also leverage the benefits of hiring part-time workers for your business.

Aniday wishes you all the best in your journey as you aim to attract top talent to your organization. However, keep in mind to adhere to the legal regulations wherever you are!

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