Some of the comments associated with this question indicate that employers and agents who process payroll on behalf of their clients are reluctant to adopt the 52-week calculation as it is too complex to apply. They instead use the 12.07% calculation. The CIPP strongly advises against utilising the 12.07% method as this has been removed from all guidance due to the outcomes of various tribunal cases on the topic of holiday pay. It is no longer a valid calculation for the purposes of holiday pay.
Impacts of the changes to the calculation of holiday pay from 6 April 2020
In terms of the impact on businesses of the changes to the calculation of holiday pay, the majority of respondents state that it has had no effect within their business, with 62% adopting this stance. 38%, however, confirm this has impacted their business.
Businesses that have not been impacted may be those that predominantly pay staff on a fixed basis, where their pay does not fluctuate from pay period to pay period.
Some of the anecdotal comments provided, suggest the reason the impacts have been small for many is because some businesses were already utilising a 52-week reference period and because the amended calculation is not applicable in Northern Ireland. As expected, others confirm that they pay staff mostly static pay, so the changes to the calculation for holiday pay for those with variable pay and / or hours has not affected them. Those that have been affected by the changes state that the calculations have made establishing holiday pay amounts more challenging and that it has increased costs for the business – both in the payment and the administration of holiday pay. It has been highlighted, however, that some businesses have seen a positive impact because of the changes, as it has stopped the practice of employees working additional overtime directly before their annual leave to increase the rates of holiday pay they receive.
18
C I PP POL I CY AND RESEARCH TEAM PAYSL I P STAT I ST ICS COMPARI SON 2008 -2021
Made with FlippingBook - Online magazine maker