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Are my employees entitled to a day's extra pay in a leap year?

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Although it only happens once every four years, the extra day that comes with a leap year can catch employers out when it comes to paying their employees. Whether or not you need to pay them for the extra day depends on if the employee is salaried or is paid hourly. In this article, our Employment team detail the difference between a salaried employee and one who is paid hourly in regards to a leap year, as well as how the changed date for the May bank holiday could affect holiday entitlement next year.

Salaried employees v hourly - paid employees

A salaried employee who receives the same basic pay every month will not be entitled to extra pay for the extra day in 2020. These workers are paid a set salary for the year, and it does not make a difference if that year includes an extra working day (except in the unlikely event that their contract provides for additional pay in a leap year).

Employees who are paid for the hours they work, or the amount of work they do, will be entitled to be paid for all work they do, regardless of the date or number of days in the year. So, if an hourly paid employee works on the extra day they will need to be paid for those hours worked.

How does changing a bank holiday affect holiday entitlement?

To mark the 75th anniversary of VE day in May 2020, the Government will move the early May bank holiday to Friday 8th May, instead of the usual first Monday in May.

The total number of bank holidays across the whole of the United Kingdom will not change, so there is no need for employers to re-calculate full-time holiday entitlements any differently next year.

However, it is important to check the wording of your employment contracts as some may simply give workers an entitlement to time off on all bank holidays, or on ‘early May bank holiday’, without giving any more detail. This entitles workers to a day off on Friday 8th May 2020 and there will be no entitlement to a day off on the original bank holiday date.

You may have issued contracts that include a specific entitlement for the worker to have a day off on the original bank holiday. This means that if you shut down on bank holidays, you could be left in the position where workers are due to be on leave on a day the business remains open but will be available for work on a day that your business is closed. To resolve this, you could use any flexibility in the contract to suggest alternative days of leave instead of the bank holiday itself, or by agreeing to a temporary amendment to the terms and conditions with workers to ensure leave aligns with the bank holiday dates.

There is no statutory right to take bank holidays off work, as long as the overall holiday entitlement provided still equals no less than the statutory minimum of 28 days per year, or no less than their contractual entitlement.

It is important that you review the contracts you have issued and existing practices before confirming your approach. Whatever method you decide on, you should notify your employees of your position on the moved bank holiday and ensure that everyone is aware of their leave entitlements for 2020.

If you have any further questions on the forthcoming leap year arrangements or on Bank Holiday entitlements, or you would like a review of your staff hand books and employment contracts, you can contact our Employment team on 023 8071 7717 or email employment@warnergoodman.co.uk.