Overtime & holiday pay – beware but no need to panic!

Office workers overtime

Over the last couple of weeks, we have fielded numerous calls and emails from worried business owners in respect of the emerging position over holiday pay.

In a nutshell, there were a number of landmark cases last year which established that workers have the right to holiday pay representative of the hours that they worked on average in the 12 week period prior to the holiday period in question. This is a departure from the previous position when it was assumed that staff could be paid only their basic pay for such periods of leave. As such, it became apparent that staff who work overtime should be paid holiday representative of overtime, as well as basic hours, and that this could have retrospective effect.

Since then there have been two major developments. The core principles within those landmark cases have not been challenged legally but the Government has now legislated to time-limit historic claims.

Employers are urged to seek legal advice on how best to deal with this issue. There are a number of strategies which could serve to minimise the risk of historic claims that need to be carefully considered prior to implementation. Employers should not delay in their approach.

For more information on this or any other Employment issue, contact our Employment team.

In the meantime, please be aware of this situation but be assured that there is no need to panic!

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