Holiday pay boost worth thousands for flexible workers becomes law on 1 April

From 1 April, well over a million temporary workers may see their pay increase thanks to the government’s decision to make rolled-up holiday pay for irregular-hours workers lawful.

By rolling up holiday pay, these workers can receive holiday pay included in their wages, as opposed to needing to request it as and when they take holiday – which can see them lose out on thousands every year.

The move has been hailed as a welcome development by Qdos, an insurance provider for flexible workers, as it extends the same paid holiday entitlement as full-time, permanent employees to temporary workers.

This change means irregular-hours workers – whose work hours are “wholly or mostly variable” each pay period, as defined by legislation – are much more likely to receive this legal entitlement.

Currently, this is not always the case; there have been instances of employment agencies and umbrella companies withholding workers’ holiday pay.

The change will combat this by creating greater transparency, because the worker can request to have this paid as part of their wages, and has been hailed as a massive boost to flexible workers.

Qdos CEO, Seb Maley, said, “Making rolled-up holiday pay lawful is excellent news– an important development for well over a million people operating via employment agencies and umbrella companies.

​​“In the past, you would have got your holiday pay when taking leave, but it’s been far too easy for non-compliant providers to withhold this – in short, meaning that not everyone receives what’s theirs.

“Now, you’ll get holiday pay as part of your overall pay packet – extra money, directly in your pocket, that you’re legally entitled to. This could boost your income by thousands every year.

“But more could and should be done to protect these workers. The introduction of rolled-up holiday pay should be the starting point for a series of reforms that show the government is serious about looking after flexible workers.

“Whether that’s by regulating the umbrella industry – promised but not yet delivered – action on late payment, or a review into the damage caused by IR35 reform, there are plenty of opportunities to choose from.”