Introduction
The purpose of this document is to describe how holiday pay is calculated and how you can configure InPay to support your holiday scheme.
The Working Time Regulations mandate that agency and freelance workers have the right to 5.6 weeks paid leave each year. Some workers may qualify for additional paid holiday where they qualify under the AWR regulations for a role that has a higher level of holiday.
InPay allows you to set up a number of different schemes to meet your requirements. Some attributes of the scheme can be overridden on a per employee basis where required. InPay allows you to specify which types of pay attract holiday and which are excluded.
The calculation of holiday pay can appear to be complex. The rules mean that the holiday pay is calculated using the average of qualifying pay over the previous 12 weeks. If no work is undertaken by an employee in a week, the period is extended back until such point as 12 weeks have been found where the employee has worked or no more periods are available.
Importers are provided to allow you to import the number of days/hours each worker has and the worker’s pay history.
It should be noted that a holiday scheme has a single holiday accrual rate. On occasions you might have an employee who works for two different clients who have different holiday rates. In these situations you must choose which rate to use for the accumulation of hours/days.
There are 2 distinct scheme types Day Type and Hourly Type
Day Type
InPay will accumulate a certain number of days for each week worked. If a week is partially worked and partially taken as holiday the number of days accumulated will be reduced accordingly. This ensures that the employee accumulates the correct number of days over a year.
Temporary workers may often earn a different amount from one week to the next. This means that the average pay may fluctuate from one period to the next. An employee will however accumulate the same number of days per period regardless of the qualifying pay per period, unless they take a holiday during that period.
Hourly Type
InPay will accumulate a fraction of an hour for every hour worked against applicable pay. .
The holiday that is paid out is based on the same twelve week reference period as the Day Type scheme. However the rate calculated is the average hourly rate. The nature of the calculation means that the rate is unlikely to fluctuate as much as the Day Types scheme.
2. Adding a Worker to a Scheme