Attention all recruiters that use umbrella companies for their candidates! Big changes are on the horizon in the realm of holiday pay, set to roll out on April 1st, 2024.
Here's what you need to know to stay ahead of the curve:
In response to the landmark Brazel v Harpur Trust case, the government is implementing significant reforms to simplify and standardize holiday pay calculations. These changes aim to address the complexities faced by workers with variable hours and pay.
Key highlights of the upcoming regulations include:
Transitioning to an hourly accrual system with a cap of 28 days per year, departing from the previous weekly entitlement approach.
Introduction of two new worker categories: "irregular hours workers" and "part-year workers," with specific guidelines for holiday pay accrual.
Permission for rolled-up holiday pay, subject to strict guidelines to ensure compliance and fair treatment of workers.
Umbrella providers are encouraged to align contracted holiday leave years with the tax year (April to March) to streamline the transition and prevent disparities in entitlement calculations.
To prepare for these changes, your umbrella providers must update contracts, handbooks, and processing systems to reflect the new requirements. This includes revising clauses related to holiday accrual rates and payment calculations.
While these changes may introduce some complexity initially, they aim to simplify holiday pay calculations for the temporary workforce, ultimately benefiting umbrella workers and providers alike.
If you haven’t heard from your current providers or you questions then please get in touch with Chris Bloor, Parasol are a marketplace vendor, that specialise in Umbrella payroll, CIS Payroll, Limited Company accounting and tax services, Business benchmarking, Compliance services and alot more. Even better for TTC members they are offering preferential rates available. Find out more here.