Analysis

Holiday Pay Ruling Represents A Giant Risk For Employers

By Adele Redmond (July 22, 2022, 7:15 PM BST) -- The U.K. Supreme Court's rejection of a decade-old method for calculating holiday pay for part-time and casual workers will likely prompt group claims for additional compensation, lawyers say, with businesses left unsure about which alternative approach to take.

The practice of rolled-up holiday pay — adding a percentage, usually 12.07%, of an employee's wages to their paycheck in lieu of annual leave — has long been considered a way for organizations whose staff work irregular part-time hours to avoid liability for a payout when their contract ends.

But solicitors say the 12.07% standard once promoted by the government has now become a liability following Wednesday's unanimous judgment...

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