How to account for holiday for ‘Zero Hours’ staff

When employing an individual on a casual or zero hours contract the statutory minimum holiday entitlement of 5.6 weeks will accrue pro rata to the number of hours and days worked.

However, the casual worker is unlikely to have regular hours, and it is not usually known in advance for how long a period of work will last.

For this reason, the best way for employers to work out holiday entitlement is to calculate 12.07% of the hours worked by the individual (based on the statutory minimum entitlement). This figure is arrived at by taking the number of weeks’ entitlement (ie 5.6 weeks in the case of the statutory minimum entitlement) and dividing this by the result of: 52 (being the number of weeks in a year) minus 5.6, multiplied by 100 (ie (5.6 / (52 – 5.6)) x 100) = 12.07%.

The employer must permit the individual to take a period of paid holiday (provided that he or she has properly requested it and subject to the employer’s right to postpone it) or pay an amount in lieu of the accrued holiday at the end of each period of work.

N.B. If a worker is found to be working under an umbrella contract, there is a risk that holiday will continue to accrue even for periods during which he or she is not provided with work.