July 2022 – Pro Rata Holiday Entitlement for Part-Timers
Employment Update for Small Businesses
As we approach holiday season, we thought it would be a good idea to provide you with some comprehensive advice about how to work out holiday entitlements for part-time staff. It can be quite complicated and difficult to get your head around, so I have tried very hard to keep it clear – good luck!
Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.
Please forward this email to any of your contacts who might find it of benefit.
Part-time staff working fewer than 5 days per week
Part-time workers are entitled to the same terms and benefits as equivalent full-time staff, but that can be calculated on a pro rata basis. So, if the full-time salary is £50,000, it should be £30,000 for someone who works a three-day week. That seems pretty clear and obvious, but the issue that seems to cause the most concern and confusion is how to pro rata holiday entitlements.
The statutory minimum annual holiday entitlement is 5.6 weeks. That is 28 days for people who work full-time/5 days per week. In many cases, that is expressed as 20 days plus bank holidays (as there are 8 standard bank holidays each year).
If you have a part-time worker who works three days per week, then they need to reduce this holiday entitlement on a pro rata basis. You can’t just pro rata the 20 days (making 12 days) and give them any bank holidays that would fall on their normal working days, as that may end up giving them less than the statutory entitlement or proportionally more than full-time colleagues, depending on their working pattern and on how the bank holidays fall in any particular year.
For example, if they work Monday, Tuesday and Friday each week, that would mean they have the 12 days plus 8 bank holidays in 2023 as all the bank holidays fall on their working days. That is the equivalent of 6.7 weeks’ holiday (rather than 5.6 weeks). Whist it is not illegal to give part-time workers more than their full-time counterparts, it is not great for morale.
On the other hand, if they work Tuesday, Wednesday and Thursday each week, that would mean they end up with the 12 days only as none of the bank holidays in 2023 fall on those days. That means they would only have 4 weeks’ holiday that year which is unlawful.
So, the only fair way to work this out is to lump the 20 days and bank holidays together as one and to pro rata that. For the person on a three-day week, 5.6 weeks’ holiday comes to 16.8 days (which you would probably round up to 17 days). That is what you would give them, but they would need to book out any bank holidays that fall on their working days and deduct it from their entitlement.
So, in the first example above, you would deduct the 8 bank holidays from the 17 day entitlement, leaving them 9 days to book when they wish. In the second example, they would have 17 days to take when they wish as none of the bank holidays would be taken as paid leave as they don’t fall on working days.
In the case of someone working Monday, Tuesday and Wednesday, in 2023 they would need to book off the 7 bank holidays that fall on their working days, leaving 10 days to book when they wish.
In each case, the part-time worker is receiving 17 days paid holiday, the only difference is the degree of flexibility over when they can book it. Which is exactly the same as a full-time person, as they have no flexibility over the 8 bank holidays and have to take it on the days that they occur.
This same principle applies where you give a holiday entitlement greater than the statutory. So, if you give 25 days plus bank holidays, that is 33 days in total (including the bank holidays) or 6.6 weeks. So the person on a three-day week would be entitled to 19.8 days’ holiday including any bank holidays that fall on their working days.
In 2022 we have had an extra bank holiday. If you have granted that additional bank holiday, your full time staff would have had 29 days this year (assuming you only give the statutory entitlement), which is 5.8 weeks rather than 5.6. So, part-time staff should have been granted an additional 0.2 of a week’s holiday (based on whatever their working week is). For the person on a three-day week, that comes to 0.6 of a day, making the entitlement 17.4 days which you would probably round up to 17.5 days.
If you are now thoroughly confused and need some help with your own part-time holiday arrangements, please contact us!
Part-time staff working 5 days on reduced hours
The calculation in the section above is only for part-time staff who work fewer than 5 days each week. If you have part-time staff who work 5 days but on reduced hours, that calculation does not apply and they receive exactly the same entitlement as full-time staff.
For example, if you have an employee who works 9.00 a.m. to 12.00 p.m., Monday to Friday, you still give them 20 days plus bank holidays. The only difference is that they are only paid for 3 hours when they take a day’s holiday, instead of the full-time day rate.
However, if you have on an irregular working pattern (e.g. 8 hours Monday to Wednesday, 4 hours Thursday and 6 hours Friday), then their holiday entitlement will need to be calculated in hours rather than days. Please contact us if you need any help with this.
National Minimum and Living Wage
The current National Living Wage and National Minimum Wage rates are:
£9.50 per hour for workers aged 23 and over
£9.18 per hour for workers aged 21 to 22
£6.83 per hour for workers aged 18 to 20
£4.81 per hour for workers aged 16 and 17
£4.81 per hour for apprentices under 19 and those over 19 in their first year*
*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.