• Helen Manson

How much accrued leave do your employees have in the bank?

There are many reasons why employees choose not to take their annual leave - reluctant to take time away from the office, 'too busy', long term sick leave, family leave etc. etc.

Whatever the reason, it's critical employers have a handle on the number of annual leave days their employees have 'banked'. The two main reasons for this are:

1. Avoid burnout / poor productivity

2. Avoid hefty payments on termination

Some quick facts to consider:

  • Legally, full time workers are entitled to 28 days per year (pro-rata basis for part-time employees). This can include public holidays provided this is paid leave.

  • Annual leave allowance should be unambiguous and in writing, clearly specifying what is entitled and if it includes public holidays. A failure to make this clear could result in claims for a breach of contract and/or holiday pay.

  • Employers should set out in writing the holiday leave year period (for example, 1 January to 31 December). If a written agreement is not in place, the leave year will run from 1 October for anyone who started work on or before 1 October 1998. If it’s later, the leave year should commence on the date the employee joined the business.

  • Any holiday pay that is accrued should be paid on termination of employment.

If someone can’t take leave due to long term sickness or maternity leave, they may be entitled to carry over. This carry-over has a lifespan and current legislation limits this to a period of 15-18 months after the end of the holiday year, after which it will be lost. Employers who wish to limit carry-over in this way should include specific wording to that effect.

It's critical employers have their annual leave procedures clearly documented, including the reciprocal amount of notice required to both book and take annual leave.

To avoid burn out, loss of productivity and large accrual payouts, contact us to ensure your procedures are clearly documented and managed.

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