11 August 2021 
Julia Ascott, Employment Taxes Specialist
*** UPDATE - PwC will be running a Time to Talk session for BUFDG members on 29 September - click here to register
With thanks to Caroline Rai at PwC for the following article...
Holiday pay for term time employees
You may be aware that there has been a recent case in the courts involving the holiday entitlement and payment of Term Time Only (TTO employees) in Local Authorities and an issue has also arisen in respect of NHS employees and overtime which means they will be getting revised holiday pay payments over the next few months.
TTO employees are entitled by law to paid holiday leave and this entitlement is usually added on (but reduced on a pro rata basis for part-time workers) to the working weeks to establish the overall salary, which is then paid equally throughout the year. A model calculation is set out in Part 4 of the green book.
In addition the holiday pay calculation for TTO employees who have variable pay or variable hours also needs to be considered, and is typically based on a 52 week average.
We are aware that unions are having discussions about the above and a number of local authorities are calculating a back payment of holiday pay for TTO employees. We appreciate that these additional payments due to employees may be quite significant. Given that the Unions will also have members employed by Universities this is likely to be of interest to you
The calculation for holiday pay differs slightly for those with regular hours, irregular hour contracts, zero hour contracts, term time workers and those leaving employment. The Government recently announced that they will be establishing a new single enforcement body to enforce employment rights and pay compliance for workers including holiday pay.
PwC is helping a number of clients to navigate their way through the complexities of preparing holiday pay calculations for different groups of employees. This includes validating back payment and setting up go forward processes. Please can you contact Caroline Rai, caroline.rai@pwc.com, to arrange a call to chat this through so that you can judge whether or not this is likely to be an issue for your University?
