Annual Leave

The Definitive Guide to Annual Leave

A good work-life balance is the key to a happy and healthy workforce. And as an employer, you have certain obligations in relation to the annual leave you must provide to your employees, whether they are full-time, part-time or casual.

In this post we will discuss what annual leave is, how it works and how much leave you need to give your employees. Let’s go.

What is annual leave in the UK?
Annual leave is a period during which the employer provides paid leave to employees. Employees can use their annual leave for anything they want, including vacations or just relaxing at home. Holidays are usually set out in an employment contract.

What is statutory annual leave?
Statutory annual leave is the minimum leave that UK employers must give their employees each year. Almost all workers in the UK are entitled to 5.6 weeks of annual leave. For full-time employees, this equates to 28 days of paid vacation.

Additional annual leave
Employers can grant their employees various types of vacation in addition to the statutory minimum vacation of 5.6 weeks. While this is entirely up to your discretion as an employer, it can be a great way to show your employees that they are valued.

Does annual leave also include public holidays?
There are eight public holidays each year in the UK and employers can decide whether to include these in the 28 days of statutory annual leave to which every full-time employee is entitled. If the public holidays are counted towards the statutory holiday, there are 20 days (or four full weeks) that the employee can take in addition to the public holidays.

You can also allow your employees to work on holidays if they take vacation at another time of the year. This can be an important element of your diversity, equity, and inclusion initiatives as it allows employees to take vacation to celebrate the holidays that are important to them.

Some companies also offer holidays off in addition to annual leave, which can be a great relief for employees.

How long is annual vacation on average?
A 2017 study found that 40% of British workers do not take full advantage of their vacation – one in six workers reported leaving more than a full working week of vacation unused.

As an employer, it is important to encourage your employees to use the vacation they are entitled to as this can help reduce stress and prevent burnout. If you’re worried about absenteeism, you can always rely on the Bradford Factor.

What is the average holiday entitlement in the UK?
According to research by the Trades Union Congress (TUC), the average holiday pay in the UK is 33.5 days, including public holidays – more than a full week more than the legal minimum.

How long after starting work can employees take vacation?
If an employee does not start his job until after the holiday year has ended, he is only entitled to part of his annual holiday. You can calculate how much vacation he is entitled to depending on how much of the vacation year is left. For example, if a new employee starts exactly halfway through the year, they will receive 50% of the normal vacation they can take over the next six months.

When does the vacation year start?
As an employer, you can set the dates for your annual vacation yourself. These dates should be specified in each employee’s employment contract as well as in your employee handbook (if you have one).

You can choose a vacation year:
– In accordance with the calendar year, i.e. from January 1st to December 31st
– In accordance with the financial year, i.e. from April 1st to March 31st

Some employers also choose to start each employee’s vacation year on the day they start working at the company. If the holiday year is not specified in an employee’s contract, it is deemed to begin on the first day of employment (or October 1 if the employee started the job on or before October 1, 1998).

How does vacation accrual work?
Some employers choose an accrual system. This means that employees “accumulate” (build up) their annual leave from the first day of work. New employees are often only allowed to take their annual leave in the first year once they have “accumulated” it.

How much vacation are employees entitled to per month?
You can calculate how much vacation an employee receives per month by dividing the total annual vacation by 12. For example, a full-time employee who receives the statutory minimum holiday is entitled to 28 days of annual leave. This is calculated at 2.33 days per month (28÷12).

This means that a new employee would be entitled to seven days’ holiday (or a quarter of annual leave) after three months of work.

Accumulation and use of leave during a medical or family leave period
Employees are also entitled to annual leave during sick leave or maternity, adoption or paternity leave. An employee can also take vacation if he or she is on long-term sick leave. This usually means that they will receive 100% of their normal salary for the period of their holiday and not the amount to which they are entitled under statutory sick pay.

How is annual leave calculated?
Employees are entitled to at least 5.6 weeks of annual leave per year. To calculate the number of vacation days they are entitled to, you need to multiply the number of days they normally work in a week by 5.6. For a full-time employee this works out to 28 days.

How do you calculate pro-rata annual leave?
Part-time employees are also entitled to 5.6 weeks of annual leave, which is calculated pro rata. For example, an employee who works two days per week is entitled to 11.2 days of paid vacation per year (5.6×2).

Partially granted annual leave
If an employee only has to take a fraction of annual vacation, the employer may not round this down to the nearest whole number. However, he is also not obliged to round up the amount to the nearest whole number.

Instead, employers should talk to their employees about how they can use partial vacation days. For example, an employee who has to take 3.5 days of annual vacation can agree to take half a day of their vacation.

Management of annual leave requests
When applying for, approving and rejecting annual leave, both employees and employers must follow certain rules.

When can an employee request vacation?
If an employee wants to request annual leave, he or she must give notice of at least twice the length of the desired leave plus one day. This means that an employee who wants to take a week’s vacation must submit their request at least two weeks plus one day before the vacation begins.

Can an employer dictate when vacation must be taken?
The employer has the right to:
– Tell employees to take their annual leave on certain days, e.g. on public holidays or on days when the company is closed. In this case, you must warn the employer at least twice as long as the vacation will last.

– Limit vacation times, e.g. by prohibiting time off during peak times. Any restrictions should be clearly stated in your employee handbook.

Can an employer cancel a vacation once approved?
An employer may reject a vacation request or cancel a vacation that has already been approved, provided that the employer provides notice of at least the period of the vacation plus one day.

Transfer of unused vacation
In some cases, employees may be able to “carry over” some of their unused annual leave into the next year. Whether this is possible or not should be specified in the employment contract.

If an employee is entitled to the statutory minimum vacation of 28 days, he or she can legally carry over a maximum of eight days to the next year. If the employee receives more than 28 days of vacation, you can allow him to carry over the additional vacation as well.

Vacation compensation when an employee leaves
The only case in which an employer can pay an employee in lieu of annual leave is when an employee leaves the company. The employer must pay the departing employee any vacation not taken. However, if an employee leaves after using more than their entitled vacation, you can deduct this from their final salary.

Do you have a vacation management system?
The world of work is becoming increasingly complex. The last thing you should be worrying about is calculating holiday entitlements, tracking them or ensuring you comply with legal requirements. Allow us to help.

IceHrm is an all-in-one HR software that helps you improve your HR work now and in the future. This includes leave management software that allows you to manage leave requests, track any type of leave (from emergencies to sickness and holidays), and handle all other important HR processes.