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Government takes action to deal with holiday pay uncertainty

The government has today (18 December) taken decisive action to deal with the current uncertainty regarding holiday pay claimsCalculating holiday pay with the announcement of a Statutory Instrument (”SI) which will create a two year backstop on retrospective claims for unlawful deductions for holiday pay. The two year limit will apply from the date a claim is submitted to the Tribunal.

Should the SI laid before Parliament, not be challenged within 40 days, the two year limitation will apply to all claims filed on or after 1 July 2015. In the meantime, there will effectively be a six month window for unlimited claims.

The two year back-stop will limit liabilities for employers where individuals do not have a three month gap between unlawful deductions, and if future claims challenge the validity of the decision that a three month gap breaks the series of deductions.

The Government’s taskforce will continue to consider the implications of the holiday pay decisions on business.

For an up to date analysis of the holiday pay cases read our Executive report 

For all our latest blogs, news and views visit our holiday pay hub

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further