What pay reforms mean for holiday park operators: Your questions answered
Holiday parks and leisure operators rely heavily on irregular-hours, part-year and seasonal staff, which are precisely the groups most affected by the latest reforms to holiday pay. Nicola Evans, Senior Associate, Wilkin Chapman Rollits, explains what recent changes mean for employers.
While the amendments to the Working Time Regulations took effect on 1 January 2024, because of leave year end dates, many businesses are only just feeling the impact.
As the tourism industry enters its busiest time of the year, employers need to know what’s changed, who is covered, and how to stay compliant.
What’s changed?
Calculating holiday pay for seasonal and part-year staff has always been a bit of a minefield, with court and tribunal decisions creating legal uncertainty, and payroll systems struggling to keep up.
The pay reforms set out to simplify this by reintroducing rolled‑up holiday pay for certain workers, creating a new, clearer accrual method for irregular hours and part-year workers, and clarifying what counts as “normal remuneration” for the four weeks of statutory leave paid at normal pay.
The changes apply to irregular hours workers (those with no fixed contractual hours and whose hours mostly or wholly vary) and part-year workers (those who work only part of the year but stay employed all year). The latter can include seasonal lifeguards, activity instructors, and holiday home sales staff who work reduced off‑season hours.
Rolled-up holiday pay
Instead of paying holiday only when leave is taken, by using rolled-up holiday pay, employers can pay an extra 12.07% of a worker’s pay in each pay period alongside normal wages to reflect the statutory 5.6 weeks’ entitlement.
Importantly, holiday pay for the four weeks of statutory leave paid at normal remuneration must reflect normal pay, not just basic pay. It must include overtime, commission, regular bonuses and shift premiums. If you fail to include these elements, you could open yourself to unlawful deduction claims.
Employers who use rolled‑up holiday pay must ensure it is clearly itemised on payslips and calculated based on all relevant earnings. Also, rolled-up holiday pay does not remove a worker’s statutory right to take paid annual leave.
Why this matters for holiday park and leisure operators
The benefits of rolled‑up holiday pay include simpler payroll for employers and more predictable pay for staff in an industry in which hours can be unpredictable.
To ensure compliance with the updated regulations, employers should:
• identify irregular-hours or part‑year workers
• decide whether to use rolled-up holiday pay
• update contracts/policies where needed
• audit payroll systems and ensure holiday pay is itemised and includes all relevant pay elements
If you need advice on how the holiday pay reforms affect your tourism business, contact the tourism & leisure sector team at Wilkin Chapman Rollits. Visit www.wilkinchapmanrollits.co.uk