A ground-breaking tribunal was recently held, ruling that employee overtime should now be considered when calculating holiday pay. While this news story has highlighted many issues for businesses, there’s one question that still remains unanswered; how will businesses track and calculate these extra costs?
Five million employees in the UK claim that they work extra hours every week. But up until now, working this additional time has not been taken into consideration when employees are on holiday. Instead, overtime workers would only receive holiday pay for the hours outlined in their contracts.
However, after a recent tribunal in The European Court of Justice, workers have won the right to receive holiday pay based on all the time that they work. This means that overtime will soon be a factor used when working out how much holiday pay an employee should receive.
A Major Concern for Businesses
Whereas the win will be sure to benefit employees across the UK; businesses could be in potential danger. Reports have stated that employers could face considerable financial losses in the future and furthermore, the question of paying out for backdated claims means that the move could cost the business industry as a whole billions of pounds.
Whilst the worries around increasing payments surround businesses, a much more challenging question is beginning to emerge;
How will businesses calculate overtime into holiday payments?
Overtime is not easy to track. Even regular overtime can vary week by week, meaning that the amount an employee is earning may not be consistently the same and therefore, calculating how much holiday they are owed will be complicated and time consuming. Calculating holiday pay by basic annual salary is a much simpler scenario as it is based on the same figure each time.
The Solution; e-days
Using the e-days software can make calculating the overtime owed to your employees a stress free, simple task. Complete overtime data can be entered directly into the e-days system. This means a full record of hours worked for each employee will be properly logged and is easily accessible so you can monitor exactly how much extra time your team has worked.
Reports can then be pulled from e-days to investigate how many hours an employee has worked, including any overtime. Organisations can then easily use this information to reflect total earnings in employee’s holiday pay.
Solving Overtime Disagreements
Most importantly for everyone is that e-days is a fool proof tool for measuring exactly how much time an individual has worked, making the whole process fair and easy.
e-days gathers all data with complete accuracy as it is either logged by the manager or employees and then sent through an approval process, giving visibility to everyone involved. So claims of employees having worked overtime on certain instances that have not been logged will simply not be considered.
The e-days staff holiday and absence management software is a brilliant way of keeping track of your team’s working hours. To make sure everyone gets a fair deal in light of the new legislation, why not see how e-days can benefit your company or download a brochure today.