Small business and tax blog

From 1 April 2009, there is an increase in the amount of paid holiday that employers have to give employees. It has increased from 4.8 weeks to 5.6 weeks per year, based on each employee’s standard or average working week.

A full-time worker, working 5 days per week, will now be entitled to 28 days (5 days x 5.6 weeks) paid holiday per year. For an employee working 6 or 7 days per week, the entitlement is capped at the same 28 days.

A part-time worker, who might work for 3 days per week, would now be entitled to 16.8 days (3 days x 5.6 weeks) paid holiday per year.

Bank holidays and public holidays can count towards the annual holiday entitlement.

If the company holiday year runs from 1 January to 31 December 2009, staff are entitled to the extra holiday from 1 April to 31 December (9 months). For a full-time worker, working 5 days per week, this is an extra 3 days, making the total for the year 27 days. For 2010, the total entitlement becomes the full 28 days.

As these are the minimum entitlements set out in law, companies that already offer their employees more generous holiday entitlements are not affected.

As the increase in holiday is a beneficial change in the terms and conditions of employment for the worker, there is no need to reissue employment contracts. However, you do need to let staff know about the increased entitlement in writing. A template letter is available here, or a template notice for a noticeboard is available here.

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