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Your guide to annual leave, entitlements and management

Aude Creveau

If you want a productive, happy, and loyal workforce, you must invest in your employees.

The average worker spends 90,000 hours at work throughout a lifetime, which is why vacation days and benefits are a must.

Plus, UK workers think about quitting their jobs around 16 times per year. A well-developed annual leave policy can help alleviate many of those thoughts, especially one that boasts a competitive edge when compared to similar companies.

As a business owner, it's vital to manage those benefits appropriately, to ensure annual leave guidelines are both adhered to and benefited from.

To better understand annual leave guidelines and entitlements for businesses, keep reading!

Statutory minimum leave in the UK

The law states that all employees are entitled to at least 5.6 weeks of paid holiday every year. That means that an employee who works the 5-day workweek is entitled to at least 28 days of paid holiday leave per year.

Part-time workers are entitled to 5.6 weeks per year, too. However, because they work fewer days and hours every week, what they're entitled to is calculated based on those hours worked. For example, if an individual works 2 days per week, they're entitled to at least 11.2 vacation days per year (2 days per week x 5.6 weeks). 

Employers can choose whether or not they want to include bank holidays in an employee's statutory annual leave.

In addition to leave benefits, Working Time Regulations 1998 dictates that workers cannot be required to work more than 48 hours per week, on average.

What's the average annual leave entitlement granted?

As a business, you only have to offer the minimum requirements for annual leave. However, many companies opt to offer more than the statutory requirement, as this helps retain employees and match job market expectations.

The average, including public holidays, is 33.5 days, which is more than a week above annual leave policy requirements.

Public sector and non-profit organisations tend to offer more paid leave than private-sector firms. While it may be tempting only to offer the minimum, you could save significantly in the long run with lower employee turnover and a more productive workforce.

Why you should have an annual leave policy

If you don't provide annual leave guidelines and policy to your staff, they'll be unclear as to how and when they can use their allotted leave time.

For example, sometimes it just so happens that most employees want to take time off during the busy season. An annual leave policy can help you relay that holiday requests could be refused during that time, or that requests will be accepted on a first-come-first-serve basis.

Employees want to know how their sick leave works, too. Rather than human resources being inundated with questions surrounding holiday benefits, it's more efficient to answer any potential questions in a clearly defined annual leave policy.

What should an annual leave policy include?

First and foremost, an annual leave policy should reveal when your company holiday year begins and ends. In this section, you can discuss carry over limits, should you choose to allow carry over at your organisation.

Are bank holidays included in your policy? What general public holidays does your company recognise? If you have both full-time and part-time employees, you must use your annual leave guidelines to explain pro-rata, and how it'll be calculated for all types of workers.

1. State your annual leave entitlement clearly

No matter how excited professionals are to begin new employment, everyone wants to know what their employee benefits are.

Your annual leave entitlement should be stated clearly in your policy. While it's ok to offer the minimum statutory allotment, it's best to remain competitive within industry standards for your business sector. The last thing you want is for employees to be turned off by a minimal policy as they're starting a new path.

Find out how to set clear time off policies with kiwiHR

2. Describe your procedure to request leave

How do you want your employees to request their time off? With whom do you wish them to make that request? Is there a system you'd like them to use to make that request concrete?

The answers to those questions must be detailed in your annual leave policy. If you take requests on a first-come-first-serve basis, make it clear. Likewise, describe what actions an employee should take if they wish to dispute a refusal for any leave request.

You can also use this opportunity to outline consequences for a staff member taking leave without approval.

3. Communicate your policies for employee resignation

Employees are permitted to take what remains of their statutory annual leave during their resignation notice period. As an organisation, you might want to offer payment in lieu of that holiday time.

It's the law that employees have to pay for untaken statutory leave, regardless of under what terms an employee leaves. If your company offers more than the statutory minimum, you can dictate your own arrangements for how to distribute the additional leave.

If an employee has taken more than what they've accrued, the law dictates that you can't take that amount from their salary, unless of course, it's written in an employment contract.

That's why it's so important to keep track of time off records.

4. Explain how sick leave works

Your annual leave policy should include details around sick leave. If employees are sick for 7 days or less, they can self-certificate their sickness. After 7 days, they must provide a doctor's note for their stated sickness.

In the UK, workers have every right to get paid for leave and continue to build up their holiday entitlements while home being sick or on maternity/paternity leave. They can also request a holiday at the same time as their sick leave.

An annual leave policy will encourage happiness and efficiency

With kiwiHR, your human resources needs will be well taken care of. We'll help you manage your annual leave with tools like accurate time off records and allowances, holiday accrual calculation, and other annual leave guidelines.

You'll be able to more effectively define and manage your annual leave policies and the different types of leaves you offer.

Are you ready to try simple HR software for all your annual leave policy needs? Start your free trial today. We are here to help!


Enjoy a streamlined absence management

Take a break from tracking employee absence, with error-free, streamlined absence management. kiwiHR's absence management system automatically calculates annual leave entitlements and balances for you.

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