Rolled-up holiday pay showing changes from 1 January 2022
Holiday Pay for temporary, casual, "bank" or agency employees.
"Rolled-up Holiday Pay"
JACS has had a large number of queries regarding holiday pay calculations under the Employment (Jersey) Law 2003, those employees who only work when work is available (e.g. temporary staff provided by agencies), or who work variable hours or are paid variable rates of pay. The Law provides for a minimum of two weeks paid holiday, or a pro-rata amount where employees do not work a full year. (Employers may wish to consider a zero hours or a variable hours written statement for such employees). (NB: Changes to the legislation were introduced from 1st September 2015 in respect of removing the 8 hour threshold for the purposes of calculating length of service and the right to claim for unfair dismissal. These changes are likely to mean that people working under zero hour contracts are employees and therefore will receive the same rights as all other employees. However this is likely to only be determined by the Tribunal.)
While it is simple to calculate holiday pay for those who have regular contracted working hours and regular pay rates, it is more difficult to calculate holiday pay when either working hours or rates of pay (or both) vary from week to week. The Law (Articles 13, 14 and Schedule 1) details the calculations that need to be made using 52 week averages in order to determine "normal" hours and "normal" pay rates but some employers see this as administratively burdensome.
As an alternative, employers may wish to consider the option of providing such employees with "rolled-up holiday pay". This facility is recognised by the Employment Forum (in paragraph 1.7 of section 5 of their recommendations to the Employment & Social Security Committee on Holiday Entitlement and Rest Days) where it is stated that such employees may be paid a sum on a weekly or monthly basis which accounts for paid annual leave. That is, holiday pay can be paid each week or month, allowing staff to take a break from work, possibly at the end of their contract or assignment, in the knowledge that they have already been paid any holiday pay that is due to them.
To calculate this sum, it is necessary to know the value of the minimum statutory annual holiday entitlement i.e. 3 weeks per annum. The value of 3 weeks equates with an additional 6% pay for each hour worked.
Employers are strongly advised (as emphasised by the Employment Forum) that the facility of "rolled-up" holidays should be provided for explicitly in the written terms of employment. Suitable wording would be:
Holiday entitlement - entitlement is equivalent to 3 weeks per annum as required under the Employment (Jersey) Law 2003. Holiday will be paid for as it is earned on the basis of an additional 6% pay for each contracted hour worked.
All employee's must be given an itemised pay slip on or before each pay period (e.g. week or month) It is strongly advised that the pay slip should clearly identify the value of rolled up holiday pay.
Public and Bank Holidays.
In addition, employees are entitled to paid leave on Christmas Day, Good Friday and on all Public and Bank Holidays. If the employee has been required by their employer to work on such days, then the employee is entitled alternative days off with pay in lieu.