Employees receiving no paid holidays
A new study by the Resolution Foundation has found that 5% of all UK employees received no paid holidays last year. In addition 9% of employees failed to receive a payslip and 23% of workers paid at or near minimum wage were actually receiving less than the minimum wage in their take home pay. The data was analysed from Office of National Statistics (ONS) reports and therefore have a degree of credibility about them. So what does this say about UK Plc and why does it matter?
The legal position
Nearly half of the employees receiving no holiday pay or payslips are zero hours workers. If you want to know more about how to calculate entitlements for zero hours contracts, please view our blog on the subject (available here). But what’s interesting here is that 53% of the non-compliance is therefore with regular employees, typically in the hospitality industry.
What is clear is that this issue now has the attention of the Government. So what are the risks for employers who aren’t compliant?
It's all about the money
Claims for unpaid holiday pay can be backdated for up to 2 years. With the statutory holiday entitlement currently at 28 days per annum, this could prove very expensive if multiple employees made a claim.
For breaches of the minimum wage, it is potentially more serious as this could result in a criminal conviction, up to a £20,000 fine per employee and the reputational impact that goes with being named and shamed. Larger companies aren’t immune to this either. Iceland could be fined up to £21 million over a salary sacrifice scheme that took their employees below the minimum wage.
In all seriousness, its not all about the money. The benefits of having a rested, engaged workforce are well known. So you are actually impacting your own organisational performance by not giving holiday pay.
What should you do next?
If you are one of the organisations paying no holiday pay or if you are concerned that you might be breaching the minimum wage, the clear message is to address the issue now as ignorance will not be a good defence. We can help you get things in place so if you need advice, call Rob on 07494 161169 or Nicci on 07494 161169.