Increase in statutory holiday entitlement – the key questions answered

  How many days’ holiday are workers entitled to?

The Working Time Regulations (WTR) set out a worker’s minimum paid holiday entitlement. From 1 October 2007, the minimum entitlement will be increased from 4 weeks to 4.8 weeks, except in the first and last year of employment, when workers are entitled to a proportion of the 4.8 weeks. This means that someone working a 5-day week is entitled to 21 days in 2007 and 24 days in 2008 if their holiday year begins January.

A further increase from 4.8 weeks to 5.6 weeks will take place from 1 April 2009. So, a full-time worker will be entitled to 27 days in 2009 and 28 days in 2010 if their holiday year begins in January.

A worker may also be entitled to additional leave above the statutory minimum under their contract.

Are bank holidays additional to minimum entitlement?

No. The statutory minimum entitlement is inclusive of bank holidays. There is no statutory right to take public holidays in addition to the minimum holiday entitlement. This means that where workers take leave on public holidays this will count against the 4.8 weeks, unless their contract provides otherwise. (Many employers give paid bank holidays in addition to the statutory minimum leave).

What if we already give our employees more than the statutory minimum?

The new regulations contain an exemption for those employers who already give 28 days’ holiday – pro-rata for part-timers. If, as at 1 October 2007, you already provide 28 days' (equivalent of 5.6 weeks’) holiday or more to your workers you will be unaffected by the new regulations, as you will already be complying with the new entitlements. Remember that bank holidays count towards the statutory minimum so if you already provide for 20 days’ paid holiday plus bank holidays you can benefit from the exemption.

However, for the exemption to apply you must also comply with certain conditions. These are that you cannot replace any of the 28 statutory days by a payment in lieu of notice and only 8 of them can be carried forward into the next holiday year.

Importantly, you can only benefit from the exemption if all of your employees are already entitled to 28 days’ leave. If you currently offer more than four weeks, but less than the 5.6 weeks, you will not get the benefit of the exemption.

Do I need to round up?

You do not need to round up to the nearest half or full-day where a worker’s holiday entitlement results in a fraction of a day but you cannot round down. In practice, you are likely to find it makes administrative and employee relations sense to round up entitlement to the nearest half day. Other options might be to allow the worker the full day’s leave but only pay for the part day due or to allow the worker to come in late or finish early on one day.

Can we make a payment in lieu of statutory holidays?

The answer is generally no, you cannot make a payment in lieu of leave other than in the year of termination. However, the new WTR regulations contain a transitional provision whereby you can pay in lieu of the additional 0.8 weeks between 1 October 2007 and 1 April 2009, if your worker agrees. (Any additional leave that a worker may be entitled to under their contract is not regulated in this way).

Can statutory holidays be carried forward?

Only 4 weeks of the 4.8 weeks must be taken in the leave year which it relates to. This means that you can agree to allow the additional 0.8 weeks’ holiday to be carried over to the next leave year (but not longer).

Do the new regulations affect when holiday is taken?

No. The new regulations do not change the existing rules relating to the notice that you and your workers need to give under the WTR to take leave. This means that you can still give notice specifying particular days to be taken as leave such as the company shut down period.

Our holiday year is a calendar year. How do we calculate the additional entitlement?

Very few employers’ holiday year will coincide with the introduction of the new entitlement in October. This means that you will have to work out each worker's increase in entitlement on a proportionate basis.

Helpfully, the government has produced a ready-reckoner to help employers work out the increased holiday entitlement which we have set out below. It can also be found here.

Do we need to change our contracts?

You do not need to reissue contracts or statements of employment particulars but you do need to inform your workforce of the change, if there is one, and how it will impact upon them. We suggest that you re-calculate holiday entitlement for each worker and notify them in writing of any change. You should also review any holiday policy and staff handbook and, if necessary, bring them into line with the new regulations.

Government Holiday Entitlement Ready Reckoner

This table enables the increased holiday entitlement for existing members of staff to be calculated. The statutory entitlement for a member of staff will depend on when their leave year begins; to work out the entitlement, read across the table from the start date of the leave year.

Further guidance

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Ready reckoner

Frequently asked questions