Employment Appeal Tribunal (EAT) rules that overtime should be taken into account when calculating holiday pay – what does it mean for businesses in practice?
The EAT ruled that people obliged to work overtime should have overtime pay and other bonuses and allowances included in their holiday pay. This ruling could lead to pay-outs worth thousands of pounds and paves the way for similar cases.
What this means in practice:
So what does this mean to you as an employer?
This is likely to be based on a consideration of the administrative costs of having two-tier holiday payments balanced against the costs of paying holiday pay that includes overtime for more than the required four weeks.
You could also consider limiting or refusing holidays after periods of high overtime or using agency or bank staff to cover periods traditionally covered by overtime.
If in doubt, contact us to see how we can help!