What is annual leave entitlement in the UK?

All workers in the UK are entitled to annual leave. Employers are required to provide a minimum number of days that their employees can take off work. Annual leave entitlement varies depending on a company’s needs and internal regulations.

What is annual leave?

Annual leave refers to the number of paid days an employee is allowed to be away from work. Employees can use this time off to do whatever they wish away from work - within reason, obviously.

The amount of annual leave you allow staff should be agreed before bringing them on-board and it should be included in their contract.

What is statutory annual leave entitlement?

The current legal minimum annual leave entitlement is 28 paid days. This is true for full-time workers, part-time staff, workers with irregular hours, zero-hours contracts, agency workers, and casual workers.

Usually, the 28 days (or 5.6 weeks) incorporates the eight statutory UK bank holidays, but it doesn’t have to. There’s no legal right for employees to have these days off and a company can choose to bring in its workers on bank holidays if needed.

Part-time employees are still entitled to the standard 5.6 weeks paid holiday, but this is worked out in conjunction with how many hours they work. For example, if they only work two days a week, they would qualify for 11.2 days leave a year (2 x 5.6).

You can use the government's holiday entitlement calculator to work out how much statutory annual leave an employee is entitled to.

Employees that work irregular hours - for example, shift workers or staff that are only required during term-time - are entitled to paid time off for every hour they work.

Statutory annual leave entitlement is capped at 28 days. This means employees that work more than five days a week are still only entitled to 28 days paid time off.

Employers can offer staff more leave than the legal minimum, but the excess leave doesn’t have to adhere to all the rules that apply for statutory leave. This is exemplified in cases where employees can accrue more annual leave the longer they work at a company.

How to put an annual leave policy in place

Having an annual leave policy ensures you and your workers are on the same page. Writing it all down means you won’t be saddled with all your staff venturing off to sunnier climes at exactly the same time.

It also avoids any disputes when it comes to busy times of the year when staff might assume they get time off, like Christmas or during the school holidays.

Here’s what you should include in your annual leave policy:

• How much annual leave an employee is entitled to
• When your holiday year runs to and from (e.g. January to January or April to April)
• How annual leave is calculated when an employee starts or leaves part way through a holiday year
• How employees should request annual leave
• The rules on carrying over annual leave
• When leave can and cannot be taken
  

It’s important to keep track of your employees’ annual leave so you know exactly who’s on holiday and when to avoid being left with no staff and to ensure everyone is using their allocated time correctly. You can use HR software to do this.

Carrying over annual leave

While businesses should ensure that employees know about and try to take their designated annual leave each year, sometimes it doesn’t happen. Under the Working Time Regulations 1998, employees that receive 28 days’ leave can carry over a maximum of eight days into the next holiday year.

If an employee receives more leave than the statutory minimum of 28 days, then it’s up to the employer to decide how many additional days can be rolled over.

From the 27th March, the government announced that workers that have been unable to take their leave due to coronavirus may be able to carry over up to four weeks of leave into the next two years.

Annual leave during maternity leave

Workers on maternity leave continue to accrue annual leave in the normal way. Annual leave cannot be taken during maternity leave but employees do have the right to carry over any leave accrued during their maternity to the following year.

Employees may take annual leave at the beginning or end of their maternity but should request it in the usual way.

Annual leave and sick leave

Employees continue to accrue annual leave while they are off sick. If an employee hasn't been able to use all of their holiday entitlement because of long-term illness, they can carry over a maximum of 20 days to the following year.

Employees cannot get sick pay and holiday pay at the same time. If they get sick while on annual leave, they are allowed to take it as sick leave instead and reclaim the annual leave they were no longer able to take. An employer cannot force an employee to take paid holiday while off sick, but an employee is able to request it if, for example, they do not qualify for sick pay.

Make annual leave work for everyone

Annual leave is an important and mandatory part of an employment contract. Make sure you get it right so that your employees are able to take paid time off without it affecting business.