Our nursery currently makes holiday payments based on basic salary only. But a member of staff recently said that any overtime or bonus paid to staff should also be included…
What should be included in holiday pay is an issue that keeps rumbling on, with clarification awaited from ongoing cases in the courts. With EU law (the Working Time Directive) currently in force, it will be for the UK parliament to decide what employees are entitled to post-Brexit.
Currently, for the first 20 days of each holiday year, holiday pay should include basic salary and other elements of ‘normal remuneration’.
Where there is no fixed pattern of work, employers have previously calculated holiday pay based on the past 12 weeks’ pay. This remains good practice, assuming this is a representative normal period. Where there is a fixed pattern of work, employers are required to decide what elements of remuneration fall within the definition of ‘normal remuneration’.
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