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Do zero-hours contracts get holiday pay?

As a UK employer, you’ll likely have many questions around zero hours contracts if you haven’t used them before. While they offer benefits for employers by allowing specific pieces of work to get done efficiently, it is important they understand how these contracts interact with things like holiday pay. In this article, we’ll discuss everything you need to know surrounding holiday pay and zero-hours contracts. 

What is a zero-hours contract? 

A zero-hours contract, also called a casual contract, are typically given for work on a specific project due to their flexibility. It is generally accepted that a zero-hours contract will mean that the employer is not required to offer minimum working hours, while the employee does not have to accept any of the work that is offered. Workers can have multiple zero-hours contracts active at the same time and employers cannot stop someone on this working agreement from getting work elsewhere. Even if a clause explicitly states this, the worker can legally ignore it if it mentions looking for work or accepting work from another employer. 

Zero-hours contracts are also used in instances where work is not constant, such as ‘on call’ services. As such, these contracts see far more use in sectors where this type of work is commonplace. Examples include: 

  • Hospitality work. 
  • Bank work. 
  • Care work. 
  • Some delivery work. 
  • Warehouse work. 

Employer responsibilities 

Although a worker on a zero-hours contract shares many similarities to a freelancer, they differ in that employers have certain legal obligations to zero-hours contract workers. This includes adhering to the National Minimum Wage (NMW) and statutory annual leave in the same way as regular full-time workers. As an employer, you are also required for the health and safety of those on zero-hours contracts while they are at work. This should result in various provisions being made, depending on the nature of the project and the kind of work involved. 

Employee rights  

Under a zero-hours contract, your rights as the individual tasked with completing the work is dictated by your employment status rather than the fact that you have the contract. Those on zero-hours contracts can be classed as either workers or employees, granting them rights associated with the corresponding status. This includes: 

  • Receiving pay slips. 
  • Rest breaks as outlined by the Working Time Regulations 1998. 
  • Protection from discrimination. 
  • National living wage and national minimum wage. 
  • Paid holiday. 

The exact nature of your employment status will bring additional rights with it. A member of the Employment Law Services Ltd team will be happy to provide clarity on your rights when on a zero-hours contract. On the other side of the coin, we also offer bespoke advice for employers on managing employment contracts. 

How is holiday pay calculated? 

Holiday pay for a worker or employee can be calculated in a number of different ways depending on their working pattern. It can be based on shifts, casual/irregular hours, or the number of days and hours worked during a week. The way you choose to calculate your worker’s and employee’s holiday pay should be outlined in their contract. Employers therefore have some flexibility in what they offer in terms of holiday pay.  

It is usually recommended that holiday pay is calculated from the end date of the last full week worked. For the purposes of this calculation, a week will typically start on a Sunday and end on a Saturday. Those with no fixed working hours (as is the case in zero hours contracts) will have their holiday pay based off the average pay received over the last 52-week period. 

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Holiday pay and zero hours contracts 

Employees and workers on zero-hours contracts have a holiday entitlement that gives them the right to a certain amount of paid holiday every year. This statutory paid holiday gives individuals at least 5.6 weeks by law. Zero-hours contract holiday pay is then calculated based on the number of days and hours worked, along with any additional agreements that exist between them and the employer. 

The holiday entitlement for a zero-hours contract worker or employee will not be affected by how many weeks of work they have done throughout the year. This is because the contract is considered to be in place for the full year. However, the calculations for holiday pay can be influenced in many ways by an employee’s circumstances. Both employers and employees can use our services to get professional advice if they are uncertain about the rules surrounding zero-hours contracts and paid holiday allowances. 


Employment law advice for zero hours contracts 

Employment Law Services (ELS) Ltd have been providing expert legal advice and support to UK employers and workforces for more than 15 years. Our experience extends to all forms of contract law, including the provisions associated with zero-hours contracts. As an employer, our team will ensure you are operating in a way that is beneficial to your business as well as those it employs. By using our employment contract services, you’ll have everything in place to provide holiday pay as it’s required. You can get in touch with us by filling out an enquiry form, or simply by booking a free consultation to discuss how we can help.