“Long overdue” regulatory reform could boost temps’ earnings by thousands every year
The government has announced its intention to introduce rolled-up holiday pay in a move that has been welcomed by industry experts.
Published in a policy paper on 10th May, the plan is part of a broader set of post-Brexit regulatory reforms to “reduce burdens, push down the cost of living and drive economic growth”.
Currently, temporary workers – including umbrella employees – typically receive holiday pay when using their annual leave entitlement.
However, low awareness of rights and entitlements among these workers, including the right to claim holiday pay, means that many miss out on money they are owed.
The change would mean that these workers automatically receive the holiday pay that they are entitled to on top of their salary. This would boost their earnings by 12.07% – a significant increase, particularly given the economic backdrop.
As yet, no effective date has been announced. However, experts are optimistic this could make a “life-changing” difference to temps.
Change will prevent “dodgy” practices
Rolled-up holiday pay would see an employer pay its temporary workers an additional 12.07% on top of their hourly rate, rather than the worker having to claim for it when taking holiday. This percentage represents a worker’s equivalent annual leave entitlement.
Responding to the announcement, Fred Dures, founder of PayePass, said the reform would “prove life-changing for many of the UK’s temporary workers”.
“All too often, temps and contractors have no idea that they have a right to paid holiday”, he said. This leads to questionable operators “profiting when temps and contractors forget to claim their accrued holiday [pay]”.
Others “make it deliberately difficult for their temps to claim accrued holiday, imposing complicated terms and deadlines”, with the same result.
Labelling the move “long overdue”, Dures also called for “an imminent roll-out” that would put an end to these “dodgy practices” and ensure that temp workers are paid what they are owed.
Regulatory shift could boost pay “by thousands every year”
IWORK is one of the industry bodies that has called for change. Its founder, Julia Kermode, said the development was “fantastic news and something we’ve been urging the government to act on”.
“By rolling up holiday pay, temporary workers will receive it on top of their wages, which means they’re guaranteed to receive it. This move could boost the average temp’s pay packet by thousands every year”, Kermode said.
Unclaimed holiday pay for temporary workers is a significant issue, with many unaware that they’re entitled to it. IWORK has previously estimated that almost £100m worth is lost each year.
“As things stand, hundreds of millions of pounds of holiday pay has been left unclaimed because temps don’t realise they’re entitled to it”.
“These workers aren’t helped by the handful of unscrupulous umbrella companies and recruitment agencies that go out of their way to make sure this statutory right isn’t claimed, before keeping it themselves”.
“At a time when every penny counts, the move to roll up holiday pay will help hundreds of thousands of temps make ends meet. It will also go a long way to stopping dodgy businesses from lining their pockets with it. Needless to say, the sooner this is introduced, the better”.
What rubbish, just another way to cheat temporary workers. Anyone working irregular hours is entitled to a lot more than 12.07%
What rubbish. A worker with an irregular work pattern is entitled to a lot more than 12.07%. This is just another way to cheat workers of their entitements.