Overtime payments
Posted on 15 May 2023
This is a great update from our friends at Gravitas HR say Harris & Co accountants Northampton #accountantsnorthampton
You may have heard in the news in the last couple of days that there has been a landmark legal decision concerning the calculation of holiday pay. The Employment Appeal Tribunal on 4th November confirmed that overtime payments (whether in respect of guaranteed/compulsory overtime or non-guaranteed/voluntary overtime) should be included in the calculation when determining how much to pay a worker for a period of annual leave.
To complicate matters further, this ruling applies only to the element of annual leave that is dictated by European Law (the first 4 weeks) and does not have to be applied to the remaining 1.6 weeks of leave bestowed by the UK Working Time Regulations.
The decision may be appealed, but this could take several months to be considered, so in the meantime holiday pay calculations should be reviewed for compliance with the law as it now stands. If staff work overtime for which they receive additional payments, this is likely to affect you
