Whilst most employers are aware that part time workers must receive the same amount of holiday as full time workers on a pro rata basis, we do get lots and lots of questions about how to administer and calculate this for various part time arrangements. There is certainly no doubt that it can get complicated, and making sure you are getting it right is not easy.
Here are the answers to some of the most common questions our consultants get asked:
Should I calculate part time holiday in hours or days?
We find employees generally prefer days where this is possible. They like to know how many days off they get, and understand how many they have left after they’ve taken some holiday. Similarly, those charged with administering holiday usually find this easier if it is done in terms of a number of days per employee. This is particularly true in a small business where there is less likely to be a sophisticated HR system in place automating the holiday process.
However, using days only works where the part timer works the same number of hours each of their working days. If they work 7.5 hours on Tuesdays and 2 hours Thursdays, administering their holiday in days simply won’t work. They would need to take an equal number of Tuesdays and Thursdays off to get the ‘right’ amount of holiday – if they took lots of Tuesdays off they’d get too much paid holiday, whilst if they took a disproportionate number of Thursdays, they would not get enough.
In these circumstances you will need to calculate their entitlement in hours, and they will need to take 2 hours’ holiday entitlement to take a Thursday off, or 7.5 hours to take a Tuesday off.
My part time worker who has reduced his hours but still works Monday to Friday says he should still get 28 days’ holiday even though he works 50% of his previous hours. Surely this isn’t right?
If your part time worker still works 5 days a week he gets the same number of days’ holiday as his full time colleagues. What you need to remember is that a day off for him only results in (say) 3.5 hours’ pay, rather than the 7 hours he was paid before going part time. It’s not the case that one day’s holiday always = 7 hours, allowing a part time worker to use up one day’s holiday entitlement to take two days off.
Therefore he is definitely reducing his paid holiday, even though if expressed in days, it sounds as though he isn’t.
How do I calculate holiday for someone who works different hours each week?
The two things set out in legislation are that everyone is entitled to 5.6 weeks’ holiday a year, and that the amount someone who is on variable pay receives when they take a week off must be calculated on how much they have been paid on average over the previous 52 weeks.
That’s fine if variable workers only ever want time off in blocks of a week – you can allow them to book the week and work out their average pay. But of course people don’t always book holiday in blocks of a week, and if someone varies their hours each week and wants a day off, you don’t know how many days off they actually have available to take. Therefore, clearly a straight calculation of days or hours won’t work for these individuals.
One option is to work out how much holiday is accrued for each hour they work. If you offer the statutory minimum holiday entitlement, i.e. 28 days for full time employees, then the calculation to ensure workers get 5.6 weeks holiday is 12.07% of time worked.
So if someone works, say, 25 hours for 3 weeks, then one week at 12 hours, one at 15 and one at 5, they will have worked a total of 107 hours over a six week period. They will have therefore accrued 12.07% of that as holiday entitlement. 107 ÷ 100 x 12.07 = 12.91 hours’ holiday entitlement, which you would round up to 13 hours.
If you offer full time workers more than the statutory minimum, you need to ensure that part time staff, including casual workers, are offered the pro rata equivalent, so the 12.07% will be a different figure, depending on what you offer
What do I do about bank holidays for part timers?
Many employers who close on bank holidays have a custom of expressing holiday in terms of ‘normal’ annual leave and bank holidays. This works fine if everyone is full time, and everyone gets the same 20 days holiday and 8 bank holidays. But as soon as you include part timers, this approach is fraught with problems.
Part timers are entitled to the same amount of holiday on a pro rata basis as full timers, and this applies to ‘normal’ holiday and bank holidays alike. So if a full timer gets 8 bank holidays, someone who works 3 days a week will get 8 ÷ 5 x 3 = 4.8 bank holidays. You can round that up to 5, of course, but unless the part time worker happens to have 5 bank holidays falling on their normal working days in any year, there will be a problem.
A higher proportion of bank holidays are on Mondays, and there are others which change each year, such as Christmas Day and Boxing Day. Depending on which days your part timer works, and on when bank holidays fall in any given year, it is likely that either more or less than the 5 will naturally fall on their working days.
This is why it is essential that (at least for part timers) holiday entitlement is both calculated and expressed as a total, not by keeping holiday and bank holidays separate. If full timers get a total of 28 days holiday, including bank holidays, then the part timer doing three days a week should get a total of 16.8 days (which you’d round up to 17), which includes a pro rata entitlement in respect of bank holidays. Any bank holidays which the part timer normally works but takes off and gets paid for should be deducted from the total, leaving the rest to be booked as ‘normal’ holiday.
I have two part time workers and the one working Mondays gets lots of her entitlement taken up by bank holidays, should I give her more?
It can seem unfair as part timers who work Mondays might not be left with many flexible holiday days to be booked on days of their choice. But the key point is that they must get the same total amount of paid leave as full timers, so you shouldn’t increase the number of ‘normal’ holiday days they get to compensate if they will still get lots of paid bank holidays off.
If a reduced amount of flexible leave is a problem for your part timer, there are a number of options you can consider. You could offer the option to work on some bank holidays (assuming this is possible), freeing up some days to take at another time. You could offer the option to change working days so that the part timer no longer works Mondays. You could offer the opportunity to take unpaid leave on some bank holidays, freeing up paid holiday to use at another time, or vice versa, allow some unpaid leave to be taken at other times.
We increase holiday with length of service, how does this work for part timers?
Often an employer will have a basic holiday entitlement, and will then make provision for an extra day to be granted when employees reach, say, five years’ service. But if full timers only earn one extra day, how does this work for part timers? The answer is that the part timer’s pro rata entitlement should be recalculated when their service reaches the trigger point for extra holiday.
For example, if full time employees get the statutory minimum 28 days until they have completed 5 years’ service, at which point it goes up to 29 days, then someone who works 3 days a week should have a new calculation done. For the first 5 years her entitlement would be 28 ÷ 5 x 3 = 16.8 days. But when she reaches 5 years’ service, the calculation should be based on 29 days instead of 28, so 29 ÷ 5 x 3 = 17.4 days.
We employ someone on term time only hours – do we use the 12.07% calculation?
There has fairly recently been case law establishing that employees who only work part of the year, but are continuously employed (most commonly term time only), do get 5.6 weeks holiday the same as those employed year-round. Previously the common practice was to pro rata the 5.6 weeks down to reflect how many weeks were being worked, just as you would reduce the number of days’ holiday down for part timers to reflect their reduced working week.
However it is now clear that because there is no provision in the Working Time Regulations to reduce the 5.6 weeks entitlement, those who only work part of the year must get 5.6 weeks as well. That means you cannot use the 12.07% calculation as above, and must instead add 5.6 weeks’ pay to the salaries of those who work term time only (assuming they do not take leave during term time).
If you’re struggling with part time holiday entitlement and would like some assistance, drop us a line.