On 1st January 2024 your employees were given new rights over their annual leave.

Instead of the previous assumption of ‘use it or lose it’, employees now have the right to carry over their annual leave in certain circumstances.  Here’s what you need to know.

What are my employees’ new rights?

Workers can now carry over up to 28 days of holiday entitlement to the following leave year. There are broadly 3 situations where your employees can do this:

1. If they’ve been off on sick or family-related leave and it’s prevented them from taking some or all of their holiday.

2. Where you’ve failed in your duties as an employer under the new rules.

3. Where you’ve agreed to the leave being carried over.

The rules in detail

1. Employees off on sickness or family-related leave

• Where sick leave has prevented them from taking all of their holiday entitlement, employees can now carry up to 20 days of unused holiday to the following year. This leave must be used within 18 months of the original leave year, and you must pay your worker at their ‘normal’ rate.

• If your employee is an irregular or part-year worker, they can carry over up to 28 days, but again this must be used within 18 months.

 

• Where your employee is prevented from taking holiday due to being off on family-related leave (e.g. maternity etc.), they can carry up to the full 28 days to the following year.

2. Where you’ve not fulfilled your duties as an employer

If you don’t follow the new rules, your employees can carry over any entitlement not taken.

You’ll have failed in your duties, if:

• You refuse to pay a worker their paid leave entitlement
• You haven’t given the worker a reasonable opportunity to take their leave and encouraged them to take it; or
• You didn’t make it clear to the worker that holiday must be used before the end of the leave year to prevent it from being lost.

  3. Where you agree to carry leave over

• In normal circumstances, you can agree to let your employee carry over up to 8 days to the next year.

• If you give employees additional leave on top of the statutory 28 days, you can also let them carryover those additional days too.

A note on Covid-19

The new rules also end the right for employees to carry over leave that wasn’t taken due to their work being affected by Covid.

Workers can still use any leave accrued under this right before 1st January, but it must be used on or before 31st March 2024.

 

What do these changes mean for you?

It’s a good idea to check your working practices to make sure you’re in line with your new responsibilities, and that you adapt your processes to include your ongoing duties so that they’re not forgotten over time.

Make sure you speak to your accountant or payroll provider so that they can help you implement the new rules.