Overtime should be included in holiday pay

The Employment Appeal Tribunal has today announced that overtime worked should be taken into account when calculating holiday pay. Currently, only basic pay counts when calculating holiday pay.

The decision centres on the interpretation of the Working Time Regulations implemented in the UK in 1998. The ruling suggests that UK companies have been interpreting the EU Working Time Directive incorrectly.

The Government estimates that one-sixth of the 30.8 million people in work get paid overtime. This means around 5 million workers could be entitled to more holiday pay. The ruling therefore has widespread implications for companies paying their staff overtime. Details of whether claims can be backdated have yet to be released.

For advice in relation to Employment Law, please contact Kate Garrett or see our full list of services on our Employment Law Page.

Kate Garrett
Solicitor

Head of Employment Team

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