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It’s a question that arises, especially towards the end of the year and here is the answer.

Can holiday be carried over into next year?

Many companies run their holiday year alongside the calendar year – which means the countdown to Christmas is also the last chance for employees to use their annual leave entitlement. But what happens when someone is unable to take all their holiday before the end of the year?

There are many reasons why employees can be left with a stockpile of annual leave to use; from busy schedules and understaffing, to simply mismanaging their holiday entitlement.

Whatever the cause, companies need to decide how best to manage people’s remaining time off. For most businesses, this means weighing up the pros and cons of carrying over annual leave.

Employees’ rights to annual leave

By law, all staff, whether permanent full-time, part-time or shift/casual workers, are entitled to 5.6 weeks holiday a year which works out at 28 days for a full-time employee.  This is inclusive of bank holidays or any other fixed closures determined by your company.  For example, you might decide to close for a week every Christmas and this would be taken as holiday by employees.

Employers must ensure that workers and employees have, the opportunity to take their full 5.6 weeks’ worth of statutory entitlement in one leave year’

Employees who are sick or on maternity and have not been able to use all of their holiday are an exception to this rule and may carry over additional amounts.

It’s up to you whether you have a policy of allowing leave to be carried over, but it can encourage staff not to take their full leave each year which can be detrimental to health and wellbeing. It can also become costly if you have a number of employees all carrying leave over and you therefore need a lot of extra cover.

Payment in lieu upon termination

The only time you can make payment in lieu of holiday is when an employee is leaving your organisation. During their period of notice your worker may be able to take whatever is left of their leave entitlement. However, you can offer a payment in lieu for unused holiday instead.

What can employers do if workers aren’t using their holiday?

It can be hard to keep tabs on who has or hasn’t used up their annual leave. However, it’s important you do because it’s very beneficial to your business. Staff working non-stop get worn out both mentally and physically which can lead to work-related stress, reduced productivity, more work-related errors and higher staff turnover. Having an employee-friendly holiday policy in place isn’t just a good perk, it’s essential to the healthy running of your business.

Holiday take up check-ins

The best option is to encourage employees to take holiday throughout the year. Let staff know that taking holidays is welcomed. Take time at company meetings to ask them about holidays and what they’ve done – if they know you’re interested they may be more relaxed and feel more comfortable taking them.

By regularly checking in with your employees and monitoring how much holiday they have left you can also ensure they take it at regular intervals.

Is this all very confusing for you?  Give us a call on 01483 697 076 and we will talk you through it.

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