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Recently, we looked at how recruitment agencies may need to include voluntary overtime in temporary workers’ holiday pay. But more changes have been announced that affect how holiday pay’s calculated – and they could have even more of an impact for agencies.
Flexible working is one of the main attractions that draws people into temping. But from 6th April next year, that flexibility means the recruitment agencies they work through will have to change the way they calculate their holiday pay – and it could mean you paying out substantially more.
Currently, a temporary worker’s holiday pay is calculated on a rolling average of their pay over a 12-week reference period. From next year, this will change to a 52-week reference period.
So, for example, if someone decides to take a holiday during a quiet period when they’ve only been working 25 hours a week, with the 12-week period they’d get far less holiday pay than during a busy period when they might work 35 hours a week. Changing to a 52-week reference period irons out this anomaly so it’s fairer for the worker.
The Government are bringing in changes as part of their Good Work Plan, which takes into account the phenomenal rise in flexible working over recent years.
As a result though, it’ll impact recruitment agencies in two ways. Firstly, depending on when your temps decide to take their holidays it may mean you have to increase their holiday pay. And secondly, it means you’ll have an increased admin burden as you’ll need to make sure you have full, accurate records of each temporary worker’s hours and pay for the previous 52 weeks (or however many weeks they’ve been employed, if it’s less than 52).
While we at Back Office can’t do much about the first, we can certainly help you with the second, taking away all your admin headaches and giving you more time to focus on your business. To find out more, call the Back office team on 01260 280 290.