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NEW HOLIDAY PAY RULING ON OVERTIME

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The Employment Appeal Tribunal ruled that employees must take overtime into account when calculating holiday pay.  This could potentially benefit up to five million employees.

Workers who regularly participate in overtime are likely to see an increase in their holiday pay, as non-guaranteed overtime they would otherwise have worked must now be included up to the first four weeks of holiday taken.

Businesses are likely to take steps to minimise the financial impact for themselves. They may alter contacts to include ‘voluntary’ overtime as opposed to ‘non-guaranteed’ or businesses may consider using part-time agency staff to cover overtime. This may have a negative impact in the long run for workers, despite their increased holiday pay.

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