This is a massive one for me and one that I spend most of my professional career talking about!!!
Many of us look forward to a summer holiday and a well-earned break. We’re just about to come into that time of year when employers will start to see the ebb and flow of their workforce as staff start to take their main holiday. It’s important to remember that annual leave is much more than just a benefit; it’s essential for the long term health and well-being of your staff. As an employer, you probably recognise that many of your employees are working long and hard, perhaps a reflection of the current recession and harder times. Therefore it’s important and in fact essential that you ensure your team take their annual leave. A holiday gives a much needed boost to often tired workers. When working long hours over extended periods of time, mistakes are made and accidents can occur. It is often the case that motivation and morale can also be low. By encouraging staff to take time off for perhaps a week’s holiday, preferably two means that those run down batteries can be re-charged! It is generally a common theme that people return with new-found inspiration, refreshed and motivated which in turn really can energise and benefit a business.
The entitlement to paid annual leave is governed by the Working Time Directive Legislation. This provides all full time employees with a minimum of 28 days leave per year, including public and bank holidays. This is then pro-rated for part time employees – and this is where the complication for many starts.
We find that one of the biggest on-going issues for our clients is calculating part time annual leave entitlements. It can be complicated so here we provide you with some easy to understand golden rules to enable you to choose the method most appropriate for your business needs.
Rule 1: You cannot treat part time employees any less favourably than your full time staff. Entitlements can be pro-rated, but the base benefit must be the same.
Rule 2: Work out your full time weekly hours as this is the anchor point. If you have two very different categories of staff such as those at head office and those in retail outlets, you may choose to have different full time hours for each category.
Rule 3: Calculate the FTE (full time equivalent) of each member of staff based on your full time hours for that category. Here’s an example: If your full time hours are 40 and someone works 30 hours, they are a 0.75 FTE if your full time hours are 35 and someone works 30 hours, they are a 0.86 FTE.
Rule 4: Following Rule 3 work out leave entitlement. As both annual leave and public & bank holidays are pro-rated, assuming a full time employee has 28 days, in the first example the employee would have 21 days leave. In the second example the employee would have 24 days. The main thing to note with this first calculation is that the day is a normal length working day for that category i.e. 8 or 7 hours if it is a 5 day working week, Monday to Friday.
Rule 5: Perhaps you are managing annual leave in hours? In some organisations, where staff work a different number of hours on each day, it may be easier to manage annual leave in hours, so that in this example both employees have 168 hours leave (first employee 21 days x 8 hours) and (second employee 24 days x 7 hours). In this case if they take a day off and they would only normally work 6 hours on that day, then it is 6 which is deducted not 7 or 8 for a whole day.
Rule 6: Be clear on the Bank Holidays! Bank holidays notoriously cause a problem. The key is to record every absence whether it is a personal holiday or a public holiday. So if the employee usually works 8 hours on a Monday and Monday is a bank holiday, you deduct 8 hours (or 1 day) from their leave entitlement. If the employee does not usually work on a Monday, there is no change to their leave record.
Rule 7: Sunday working; where an employee works short days on a Sunday, it is important to ensure that they don’t use all their annual leave entitlement to take every Sunday off! Therefore it is essential that your policy is well written restricting this practice so that may mean no more than 6 Sundays per year and that your managers are trained to manage holiday absence efficiently and ensure adequate cover for the business.
Rule 8: Where an organisation has staff who do not work regular weekly hours, managing holiday accurately is much harder. We recommend accruing holiday based on actual hours worked on a weekly basis. The accrual rate is determined by your full time hours and normal leave entitlement. Then for every hour worked, holiday is accrued. If the person works every week (or most weeks) then they need to be able to take their leave. If they are a temporary member of staff or only work periodically, then it may be better to pay them each month for the holiday they have accrued. This should show as a separate line on their pay slip.
Getting holiday right is important, legally, morally and for the sake of the business. We recommend you ensure you have a clear policy which supports your business needs and culture. Understand what you have to do and clarify what you want to do. Communicate it to staff and if in doubt, seek advice. Ensuring staff use their annual leave entitlement is for the long term health of your business as well as for good morale. Oh, and don’t forget to lead by example. You are no good to your business if you are exhausted. On that note, have a good holiday; we’re off to book ours!
For more information, or for help with drafting your annual leave policy, contact us on 01923 504100 or at email@example.com
As business owners we should all have a business continuity plan, but talking to my small business clients, I wonder how many of us do?
What happens if we are ill? What happens to our business when we go away? What happens if our Internet access goes down? What happens if our staff can’t get to work?
Loosing a day’s work as a result of the strike is a real problem for many businesses, especially as it is still unclear how we will be affected. Will the trains be running, will the airports be open, will staff have Childcare if their child’s school closes? Will there be gridlock on the roads? The disruptions are endless and not something our generation have really had to deal with. I certainly remember the teachers strikes of the mid 80’s and the impact that had on my schooling, but I didn’t have the realities of running a business to contend with.
As many of my readers know I have one employee, she can work from home, but can she work with a six year old running around? Should she work from the office and bring him in? According to David Cameron, it would appear so. But what if we worked in a shop, or a factory? Would it be appropriate or safe for her to being her child to work?
If she takes the day off, should it be paid or unpaid? Could she perhaps use her holiday time? Well she could if she had time left, but as we are nearly at the end of the year, most employees should have used up their annual leave or have some booked off for the Christmas period. So what can an employer do? Technically if an employee has no leave left to use, you could either give them the extra day, or insist they take it unpaid. If you offer an annual leave scheme above statutory, i.e. provide more than 28 days, you could
‘borrow’ a day from next year. Be aware you can’t use this option if you only provide the statutory minimum as the law requires employees to have their full statutory entitlement in a year.
If in doubt, seek advise, but make sure you stay legal and safe.
Share your thoughts and let us know how your business will continue during the strike on Wednesday. If you are reading this post after the strike, do let us know how you got on and the issues you encountered.
The current travel ban is affecting everyone, but how are employers coping?
There are several issues to consider as an employer:
~ Firstly, the impact of having employees absent from work as they were on holiday and are now stuck, and
~ secondly, the impact on business of having employees unable to travel to meet with clients, attend training, attend meetings etc. or to return to the office from such meetings.
So how are employers coping?
Well the second issue is perhaps the easiest to deal with. With the increase in technology, people have laptops, internet access, skype, instant messaging, smart phones etc. and it is now easier than ever to stay in touch with people, or work remotely.
The first issue is a little more complex.
~ Employees are not likely to have taken their laptop on holiday with them, therefore they have no way to work remotely.
~ Some employees may not need a laptop for work as their role involves face to face contact with the customer i.e. in a retail environment.
~ If they are on annual leave, do you continue to pay them?
~ Do you deduct absence days from their annual leave entitlement? and what happens if they haven’t got enough?
The answers to these questions will vary significantly between businesses and there is no right or wrong answer. There are however, some key issues which must be considered when taking decisions on how to treat these employees:
~ Firstly, you need to be aware of discrimination. Treat all employees consistently. Ideally you will have a business continuity policy and procedure and this should provide you with a framework for handling such situations.
~ Secondly, clearly communicate what you are intending to do and how it will be done. This reduces fear and panic among the workers, especially those who are stuck back in the office, not knowing what to do.
To get more assistance with ensuring the risk to your business is minimised, please contact us on 01923 504100 or via our website at www.dohr.co.uk