As an employer you have a legal duty (under the Working Time Regulations 1998) to give your PAs paid time off over the year to allow them to rest and to protect their health and safety. This guide will help you meet all the requirements around holiday pay and entitlement that you must meet as an employer and make it easier for you to explain holiday entitlement to your PAs.
Under the Working Time Regulations 1998 you have a duty as an employer to provide paid time off for your PAs during the year to ensure their health and safety.
Your PA’s entitlement to annual leave
Your PAs are entitled to 5.6 weeks paid leave per year. This includes bank holidays. Under these arrangements most employers will allow full-time workers four weeks annual leave plus eight days leave for bank holidays (the extra leave for bank holidays does not have to be taken specifically on bank holidays). Part time workers have the same rights on a pro-rata basis.
This is called statutory holiday and it is the minimum that you must legally provide as an employer. Key pieces of information to remember about your PA’s holiday rights are:
- your PAs start building up holiday entitlement as soon as they start work
- you can manage when your PAs take holiday by asking them to take holiday at times convenient for you
- PAs get paid their normal hourly rate for their holiday
- when they finish working for you, your PA is entitled to be paid for any holiday they have not taken
- bank and public holidays are included in the 5.6 week minimum entitlement
- your PAs accrue holiday leave throughout ordinary and additional maternity leave, paternity and adoption leave and shared parental leave
- your PAs also accrue holiday during sick leave
- your PAs are also eligible to holiday pay on any regular overtime that they work. There is no definition setting out how regularly overtime must be worked for it to be included, but the general principle is that pay that is “normally received” should be included in holiday pay. If your PA has worked a pattern of overtime over a period of time, payment for that overtime is pay that they normally receive and must therefore be included in holiday pay.
Informing your PA
The details of how much holiday your PA is entitled to (i.e. just the statutory minimum or additional on top of this) should be confirmed when they receive a formal job offer from you and reiterated in their employment contract. You must state the following in your PA’s employment contract:
- What their annual leave entitlement is
Minimum statutory entitlement is 5.6 weeks per year
- How much notice your PA must give you when they wish to take annual leave
Four weeks’ notice is recommended so that you can arrange adequate cover while your PA is on holiday. PAs are required to give notice to you if they wish to take a holiday. If this is not written into their contract specifically the default notice period is twice as long as the period of leave requested e.g. a PA wanting one weeks holiday needs to give you two weeks’ notice when making a request.
When you receive their request, you must consider whether it is convenient for you for your PA to take holiday at the time they have requested. If it is not e.g. because you cannot arrange cover, you can refuse their request and suggest an alternative date. But you must let your PA know this by at least the same amount of time as the amount of holiday requested e.g. if you refuse a request from your PA to take seven days off you must let them know at least seven days before the holiday was due to start.
Any other conditions that apply – You can ask your PA to take annual leave at your request e.g. if you go on holiday or go into hospital and you will not need their services. If you need your PA to take their leave on certain dates, then again, you must tell them this at least twice as many days before as the number of days you need them to take.
Informing your payroll service
Please inform your payroll service each time one of your PAs takes holiday so that this can be recorded on the PA’s pay slip. You should also advise the payroll service of which PA is covering these hours so that they can be paid too. Please make sure you have enough in your budget to cover these costs.
Calculating holiday pay
The following employer templates will help you to calculate your PA’s annual holiday entitlement and their holiday pay:
Employer template 3.5(b) Holiday record sheet
You should use this sheet to record all holiday that your PA has already taken and/or has requested for the future.
Employer template 3.2(a) Holiday calculator (fixed hours)
Employer template 3.2 (b) Holiday calculator (casual or zero hours)
Your PA’s entitlement to paid annual leave starts on the first day of employment and is not subject to a minimum period of employment.
For each week of leave accrued your PA is entitled to one week’s pay. A week’s pay is calculated according to the type of work carried out. If your PA is:
- on fixed hours and pay – it equals the amount due for a week’s work
- on variable hours and pay – it is based on the hours the PA would have worked during that week
- has no normal working hours – it is based on the hours the PA would have worked during that week
Guaranteed overtime should be included in this calculation, this is where the employer is obliged by the contract to offer and pay for agreed overtime.
Non-guaranteed overtime is where there is no obligation by the employer to offer overtime but if they do then the worker is obliged, by the contract, to work overtime. The holiday pay entitlement would include the overtime hours that the PA would have worked that week.
Workers on long-term sick leave continue to accrue holiday while they are off work. It is unlawful to include an amount for holiday pay in a PA’s hourly rate. This is called rolled up holiday pay. Holiday pay must only be paid when holiday is actually taken.
- If your PA’s employment contract states that they work 10 hours per week but they occasionally work an extra two hours a week, for annual leave purposes, you would pay them for 10 hours. This is because their normal working hours are 10 hours per week.
Alternatively, if you employed a PA on a contract of ten hours per week and then shortly afterwards, both you and your PA agreed that they would work 12 hours every week, then you should pay them for 12 hours a week for annual leave.
Bank and public holidays are considered normal working days if you use the example employment contract provided by Independent Lives and are included in the 5.6 weeks statutory holiday entitlement. Therefore, if your PA does not wish to work on these days, they need to ask for this as annual leave and provide you with notice of this request as outlined in the employment contract. If you give your PAs paid leave on a public or bank holiday, this counts towards 5.6 weeks holiday entitlement. Please keep a record of any holiday taken.
If your PA works on a bank or public holiday, there is no automatic right to an enhanced pay rate unless the employment contract specifies this or you have verbally agreed this. If you agree enhanced rates of bank holiday pay, you should be clear with your employees whether this is a one-off arrangement or a practice that you intend to apply at each bank or public holiday. Such arrangements should be made clear to employees, ideally in writing to reduce risk of dispute with employees in the future.
Carrying holiday over
There is no statutory right to carry leave over. The example contract provided by Independent Lives states that all entitlement to leave must be taken in the year that it is accrued and cannot be carried forward to the next year. This is because you must provide your PAs with paid time off to ensure their health and safety.
However, if Covid-19 has prevented your PA from taking annual leave. Your PA would be entitled to carry over up to four weeks statutory paid leave, if they are unable to take it in the current year, into the next two years.
Exceptions to this may be agreed only if a worker cannot take all of their leave entitlement because they are already on a different type of leave (for example sick, maternity or parental leave). They are allowed to carry over a maximum of four week’s paid holiday and it must be used up within 18 months of the date it carried over from.