Planning your payroll over the holiday season

Date: 17th December 2020

Christmas is almost upon us and 2020 is, finally, nearly over! Before you open the champagne, it’s time to consider your staffing needs over the holidays.

Depending on your industry you may be closing down for a short period, or you may be hoping to make the most of the short period to make up for income lost during lockdown. In all cases though, you need to plan for the financial implications of the holiday period and know your legal requirements.

Watch out for Monday

This year Christmas falls on a Friday and Boxing Day on a Saturday. This means that Monday 28^th December will also be a public holiday. The same is true for New Year (the day after New Year public holiday is Monday 4^th Jan). What does this mean if and an employee works on 28^th December and/or 4^th January this holiday period:

If your employee normally works on a Monday they are entitled to public holiday pay (time and a half) AND a (paid) day off in lieu.
If your employee doesn’t normally work on a Monday, they are entitled to public holiday pay (time and a half) only.

This means that if you are open for business on Monday 28^th December or Monday 4^th January, you need to pay your staff time and a half plus offer anyone who would normally work Monday, a day off in lieu.

Additionally, your employees do not have to agree to work on public holidays unless it is noted in their employment contract.

More about working on public holidays

Business is closed

If you are closing up for a period over Christmas and New Year, you need to give your staff at least 14 days’ notice. Employees are required to take annual leave during this period. If they have built up enough annual leave, they will need to be paid. There are also requirements if they do not yet have enough annual leave (for example, they have been working for the company for less than a year).

More about annual closedowns

Your staff are taking ‘Annual Leave’, but the business is open as usual

Employees are entitled to up to four weeks paid annual leave a year. However, the dates that an employee can take this leave must be negotiated with the employer. There are a few other obligations too:

An employer must give their employees an opportunity to take at least two of the four weeks annual leave continuously. This is to allow the employee to have an extended opportunity for rest and recovery.
A refusal by the employer to grant annual leave on the dates requested must have fair and reasonable grounds.
An employer can’t cancel an employee’s annual leave unless they agree to it.

An employer may also grant leave in advance, if they choose to do this, but there is no legal requirement.

More about taking annual leave

What you need to do

Negotiate annual leave dates with your employees.
Give them 14 days’ notice of any annual shutdown or if you require them to take leave on certain dates.
Keep accurate records of all leave taken by your employees.
Plan for the financial implications of the holiday period.

More about getting holiday season payroll & employment law right

If you would like some help to plan for the financial implications of the holiday period, or understanding your legal requirements, get in touch.

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