January payroll post - Holiday Pay for Temps and Umbrella Workers

​Holiday Pay for Temps and Umbrella Workers: A Positive Update

As many of us have recently been enjoying some well-deserved time off, there's been a quiet yet significant change that has taken place. You may already know that some umbrella companies and recruitment agencies have a tendency to withhold holiday pay from their workers – a legal practice that's certainly not ethical.
Luckily, there's been a positive development in this area that's worth noting.
The Misconception of "Rolled-up Holiday Pay" Being Unlawful for Irregular Hour Workers Has Been Debunked. In the past, there have been some who defended their unethical position, claiming that "rolled-up holiday pay" was illegal. However, this is no longer the case. Recent changes to the law now recognize rolled-up holiday pay as a legitimate way to provide holiday entitlement for irregular hour workers. This is fantastic news! Clockwork can now offer rolled-up holiday pay for leave years that begin on or after April 1, 2024

​Understanding Rolled-Up Holiday Pay: Definition and Implications

​Have you ever heard of rolled-up holiday pay? It's a way of receiving your holiday pay entitlement as part of your normal pay rate. However, this practice was declared unlawful because it goes against the fundamental principle of the Working Time Regulations, which states that everyone should be given paid time off work. As a result, many agencies and umbrellas accrue holiday pay on behalf of their workers, which is then paid to them when they take a break.

​The Advantages of Rolled-Up Holiday Pay

​Have you ever wondered about the benefits of rolled-up holiday pay? Unfortunately, some agencies and umbrellas have exploited the system to their advantage by preventing their workers from receiving the proper holiday pay they deserve.
Rolled-up holiday pay, on the other hand, ensures that you receive your holiday pay at the same time as your regular pay, which means it can't be wrongfully withheld from you. It's important to note that you won't be entitled to any pay during your holiday period, but this arrangement guarantees that you'll receive your holiday pay when it's due.

​What if I don't want rolled up holiday?

​It's essential to recognize that the new law doesn't mandate rolled up holiday pay, but rather it provides an option for it. Your agency or umbrella company will guide you on how they handle your holiday entitlement. It's generally best practice for you to make the decision whether you want your holiday pay to be rolled up (i.e. paid on top of your normal rate) or accrued (i.e. paid when you take time off).
The new legislation does not dictate that we must offer rolled-up holiday pay, but there is no reason for us not to – if any worker or yourself is not being paid through Clockwork and hasn’t had any holiday paid double-check with the umbrella it could be that they plan to profit by withholding your money.

​Providing Transparency with Holiday Pay Entitlements

At Clockwork, we believe in transparency, which is why we 1. We are SafeRec certified, 2. We always keep our contractors informed about their holiday pay entitlements. On each payslip issued, we clearly outline how much holiday has been paid, released, or accrued.

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Did you see our latest articles:
December: https://www.clockworkcontracting.co.uk/news/december-newsletter-hmrcs-latest-umbrella-guidance-helpful-or-nothing-new

November: https://www.clockworkcontracting.co.uk/news/archives/11-2023
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