9th July 2007


 Issue No.  2007/18



 New Regulations on the Holiday Entitlement Increases 

Information Update 2007/03 (24th January 2007) (available on the website www.sentientuk.co.uk) reported on the proposed Increases to the Statutory Minimum Holiday Entitlement.
Further changes have been announced to the Increase in Holiday entitlement following the latest consultation; and Regulations are now to be placed before Parliament which should be approved later this month, giving 3 months notice of the change.
Current Holiday Entitlement
The Statutory minimum entitlement is 4 working weeks. For someone working 5 days a week, this equates to 20 days. Bank holidays can be included within this entitlement.
Proposed Increases
1st October 2007, the working weeks holiday entitlement will increase to 4.8 working weeks entitlement (or 24 days for someone who works 5 days a week)
1st April 2009, the working weeks holiday entitlement will increase to 5.6 working weeks entitlement (or 28 days for someone who works 5 days a week). 
It was originally proposed that this second stage increase would be implemented on 1st October 2008, but the date has been delayed by 6 months as a result of the recent consultation.
Any time off for bank and public holidays can be included in the additional entitlement (e.g. if you already offer your workers 4 weeks' leave plus time off for bank holidays, your holiday entitlement will not need to increase);
Other Proposed Changes
The current holiday rules do not permit the payment in lieu of holidays, except in the case of an employee leaving employment part way through the holiday year. However, the proposals provide that payment in lieu of the new additional holiday entitlement (the additional 0.8 weeks) can be made until 1st April 2009. This is a temporary transitional measure to assist employers with implementation of the increases.  After 1st April 2009, you will not be able to make payment in lieu of holiday except if an employee leaves part way through the holiday year.
However, some or all of the additional holiday (0.8 weeks) may be carried over to the following leave year with the agreement of both the employer and worker.
The DTI say that as an incentive for early compliance with the proposed Regulations, employers that already meet the full requirements of the regulations as at 1 October 2007 (i.e. provide workers with the equivalent of 28 days’ holiday (including bank holidays), without payment in lieu) will be taken outside of the new Regulations, as long as they continue to meet those requirements.  It is difficult to see any direct benefit from this incentive except to say that if you give 28 days in total then you do not need to give any more.
And for the avoidance of doubt…
The holiday entitlement will be calculated on a pro-rata basis for part-time workers (4.8 then 5.6 times their usual working week), regardless of whether or not they usually work on bank holidays.
The increases from October 2007 and April 2009 will be calculated proportionally depending on when the holiday leave year starts.
There will be no qualifying period for the additional holiday entitlement and that partial days’ holiday need not be rounded up to the nearest full day.




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