With Christmas fast approaching, many employees who have not used their full annual leave entitlement this year may be looking for an extended break over Christmas. Others may be planning longer breaks in 2021. This means employers face the challenge of tracking and managing holiday carry-overs as well as tracking peoples’ annual leave requests.
In this recently updated article, we take a look at the rules about holiday-carry over and the importance of taking professional advice if you have any doubts about the revised regulations.
Revised working time regulations
Back in March 2020, the UK Government announced that existing rules regarding carrying over annual leave from one financial year to another will be relaxed. Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 years.
The relaxation of the existing rules – which date back to the 1998 Working Time Regulations (WTR) – is intended to provide businesses affected by COVID-19 with the flexibility to better manage their workforce, while protecting employees’ rights to paid holiday.
This temporary suspension of the 'no carry over’ regulations will help to alleviate pressure on employers where workers ask to reschedule leave already booked or seek to delay booking leave as a result of social-distancing requirements, business closures and travel restrictions.
The law applies to anybody who is unable to take leave because of COVID-19, for example because they have been self-isolating or ill, leaving them unable to take paid holiday before the end of the year, as well as those who couldn’t take leave because they had to continue working. Anyone who has been furloughed may also be able to take paid leave as usual.
The changes will amend the WTR, which apply to almost all workers, including agency workers, those who work irregular hours, and workers on zero-hours contracts. The Government’s official announcement summarises the main points all employers should be aware of.
What is holiday carry-over?
Holiday carry over is the idea that employees carry forward remaining days from their annual leave entitlement from one year to the next.
The WTR originally gave workers 5.6 weeks of annual leave in each leave year. It specifies that 4 weeks of this leave must be taken in the leave year to which it relates, and the remaining 1.6 weeks can only be carried over by agreement with the employer for one leave year. There are some exceptions to this, including where workers cannot take annual leave due to sickness or maternity leave.
Although many of the WTR rules still apply, the Government’s new guidance regarding holiday carry over is an important update and one that applies to businesses of every size.
Tips for employers
- Work out how much accrued annual leave staff have for the rest of 2020 and work out what this liability will cost.
- Think about what leave you could require employees to take now that Christmas is just weeks away. Consider discussing this with workers so that you can potentially use the Christmas period to reduce this annual leave liability.
- If a staff member is unable to take their leave, agree with them that they can carry over a certain number of days into the new leave year providing it is taken by a certain date.
- If a date cannot be agreed, serve notice on the employee requiring them to take holiday.
- Finally, discuss with staff their holiday plans so that you can manage the ongoing liability and put together a plan about how to reduce it.
Why taking leave now has never been so important
While leave can be carried over, the conciliation service ACAS has recommended that people should still take leave that is owed to them, and that employers should still be encouraging staff to take their paid holiday.
Many people are working under immense pressure and furloughed employees are dealing with uncertainty and may well suffering from far higher levels of stress than usual. People need rest and even during lockdown when travels restrictions are in place, it’s important that people take time off to re-charge their batteries. This is essential for avoiding burnout which can have a highly negative impact on people’s ability to perform.
This applies equally to business leaders, many of whom are under incredible pressure. Although taking leave at the moment may seem unthinkable while so many companies are struggling to stay afloat and work towards recovery, business owners and managers need to look after themselves and rest when they can. Their need to recharge their batteries is also very important.
Where the Government’s new guidance regarding holiday carry over is welcome news for businesses and employees, encouraging people to take a break this year remains important.
Professional guidance from Breathe's partner network
The recent relaxation of existing regulations adds a new layer of complexity to managing leave and if you are in any doubt about what to do, we recommend speaking with one of our HR consultant partners.
Additional resources for your business
We'll be keeping our COVID-19 help page regularly updated with resources designed to help businesses come back stronger.
We have also co-hosted a number of webinars with leading HR experts on subjects including resilience and developing return to work policies.
Our free holiday calculator is a great tool for calculating holiday allowances and entitlements for full and part-time workers.
If you’re still managing holiday manually, take a 14-day free trial of our cloud-based HR management software and see for yourself how easy it is to win back time in your day and help your people be the best they can be.
Finally, if you need a hand managing the transition back to the workplace, try our brand-new rota-management software, Breathe Rota. It's completely free until the 1st January 2021 so you can focus on getting back on your feet as safely as possible.
The following three resources have been published by ACAS:
Some final thoughts
As 2020 draws to a close, we're all in need of some time to rest and recuperate. Of course, many people - especially our key workers - won't be able to take time off over the Christmas. Many small businesses and their team members have also worked hard this year, keeping going throughout incredibly tough trading conditions. Annual leave and taking time to recharge batteries have never been so important.
The Government’s announcement of its amendments to the WTR is helpful for employers and employees. Holiday carry-over has always been a contentious issue which has need to be managed carefully in line with official regulations and a company’s own internal policies.
As we begin to emerge from the crisis and work towards recovery, taking leave will be key to re-energising people and paving the way for UK small businesses – the backbone of the economy - to come back stronger.