Payroll
... they have the option to carry some annual leave over into the next two leave years
quieter periods of the year when weekly pay is normally lower. The Good Work Plan addressed this issue and stipulated that a 52-week reference period should be used instead of the previous twelve-week reference period. If a worker has not been in employment for sufficient time to build up a complete 52-weeks’ worth of pay data, the employer should use the data relating to the number of complete weeks held. Weeks in which no remuneration is payable must be discarded. Previously, there was no limit to how far back employers could go in order to build up twelve-weeks’ worth of pay data, but from 6 April 2020 a limit of two years or 104 weeks applies. Any weeks extending beyond 104 complete weeks, prior to the first day of the worker’s holiday, are not to be used. Similarly, employers only need to count back as far as is needed to achieve 52-weeks’ worth of pay data, and this can be less than 104 weeks. In scenarios where a worker takes leave prior to completing a complete week’s work in their job, the employer has no data to use for the reference period.
to support the UK through the outbreak of coronavirus, for example, in industries such as healthcare and food. Any individuals placed on furlough for the purpose of the CJRS will continue to accrue holiday entitlement during the period in which they are furloughed. They can continue to take holiday whilst on furlough but must be paid at their normal rate of pay, or if they receive variable pay using an average of the 52-week reference period. In these situations, employers can still claim the grant for holiday pay paid during furlough, but only up to 80% or a cap of £2,500 per month. They must top up the additional amount so that the employee receives their usual holiday pay. n Holiday entitlement and pay is definitely a section of employment law which is constantly evolving, and payroll professionals should be alert to further almost inevitable developments.
Therefore, as the reference period cannot be used the employer should instead pay an amount which fairly reflects pay for the length of time that the worker is on leave, considering the pay for the job, any pay already received by the worker and what other workers completing a comparable role are paid. Impact of COVID-19 At the time of writing, a staggering amount of policies have been impacted by the crisis, and it has also influenced the way in which people take annual leave. Workers may have been prevented from taking their full statutory annual leave entitlement, so now they have the option to carry some annual leave over into the next two leave years. This applies only to the four weeks of leave under the EU Working Time Directive (see page 40). The rationale to this move is to ease pressure on employers that may require staff to work
PAYROLL AND HR LEGISLATION UPDATE 50% DISCOUNT FOR CIPP MEMBERS *
Currently being delivered
via virtual classroom
One day
Updated every seven days ** 7
This focused course represents the single best opportunity to be briefed and updated on changes affecting payroll.
This course covers: ● The Coronavirus Job Retention Scheme (CJRS) and other developments as a result of Covid-19 ● Tax and NI contributions ● Operating Pay As You Earn (PAYE)
● Statutory pay and leave ● Statutory deductions ● Expenses and benefits ● Pension ● Employment rights and other matters
Book online at cipp.org.uk/training or email enquiries@cipp.org.uk for more information.
cipp.org.uk @CIPP_UK
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* Terms and conditions apply. ** Correct at time of publication. Course materials checked and updated every seven days.
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| Professional in Payroll, Pensions and Reward |
Issue 61 | June 2020
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