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Post Info TOPIC: Holiday allowance pro rated to reduced hours


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Holiday allowance pro rated to reduced hours


Hi Guys,

I'm probably being really dim here!! But, one of our employees worked full time 42.5 hours per week (8.5 hours, 5 x days a week) and had a holiday allowance of 30 days. The employee has now dropped their contracted hours to 34 hours per week (8.5 hours, 4 x days a week) and is receiving a reduced monthly salary proportionately. One of our directors wants the employee to still have a holiday allowance of 30 days (and not have this proportionately prorated down to say 25 days) but for the holiday days to be 'worth less'.

What i cant quite get my head around is whether as the employee's monthly salary is reduced in line with their reduced hours do this cover off their full holiday allowance of 30 days being paid at a lower rate so no other adjustment is needed?

Your thoughts would be much appreciated.

Many thanks,

Kim



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Kim Ellison


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Posts: 1607
Date:

HI Kim

If you use the example of the employee being paid 30000 PA then 30000/260 (assuming a 5 day week) = 115.38 per day. If they then drop to 4 days per week then their salary drops to 24000 PA which is then 24000/208 = 115.38 per day, so holiday pay doesn't really change on a daily basis. I think to change it on a daily basis in line with the reduced salary it would be 115.38/5*4 = 92.30 per day but I'm not sure that would be legal. The best thing for them to day is reduce the days prorata as that still keeps the same amount of weeks off. (I think)(30/5=6 weeks 30/5*4=24/4=6 weeks)

Of course I could have totally mis-understood your post

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Steve
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