Paying an employee the right amount is both a legal requirement and critical to fostering positive employer-employee relations. However, disputes over pay remain one of the most common workplace issues, and while they are generally easily resolved if dealt with quickly, they are best avoided altogether.
In some cases, the issue often arises when there is a difference between the pay an employee is entitled to and what they might be expecting. For example, employees may be wondering if they will be paid more for working the extra leap-year day.
In this guide, we explain what the law says about pay and how employers should deal with queries relating to pay during a leap year.
Do you pay employees more in a leap year?
So once every four years we have an extra day in the calendar, the 29th of February. As 2024 is a leap year with 366 days, rather than 365, this means that employees will work one more day than usual in February — but do you pay employees more in a leap year?
In answer to this question, much will depend on whether you pay workers an hourly rate or a set annual salary. For those on an hourly rate, these workers are entitled to be paid for all of the time that they actually work. This means that if they have worked an extra day, so if they work a shift on 29th February 2024 (which falls on a Thursday), you will be obliged to pay them for that extra time, unless the 29th falls on a day they would be working in any event, in which case you will pay them as usual. However, if someone earns an hourly wage and works an extra 8 hours on 29th February due to the leap year, they will be entitled to receive an extra 8 hours of pay. Put simply, additional work equates to additional pay.
In contrast, for salaried staff who receive the same basic pay for every month or pay period worked, they will not be entitled to any extra pay for working an additional day this year. This is because they are paid a set salary for the whole year, where that salary is paid at regular payment intervals, regardless of how many days there are in each month. This means that the extra leap-year day will have already been factored into their overall annual earnings. As such, except in the unlikely event that their employment contract provides for additional pay in a leap year, you will not be required to pay a salaried worker any extra.
Pay rules for different types of workers
The question of whether or not a worker will be entitled to be paid for the extra leap-year day will all come down to how they are paid. Below we set out in more detail the two main types of workers in this context and how the leap year will affect their pay entitlement:
Hourly-rate workers
If a worker is paid hourly, they may be legally entitled to an extra day’s wages if required to work the additional leap-year day on 29th February, although much will depend on their shift pattern and pay reference period. For example, in the case of an hourly-paid worker who has a pay reference period of one week, ie; where they are paid weekly, they will not be entitled to be paid any extra because the number of days worked in their pay reference period has not changed. This is because a leap day does not mean a 7-day week becomes an 8-day week, so these workers will have worked their usual hours.
However, when it comes to an hourly-paid worker with a pay reference period of one month, ie; where they are paid monthly, they should see an increase in their pay for that period because the number of days worked in the pay reference period has changed. As there are 21 working days in February 2024, as compared with 20 for February 2023, the hourly-paid worker will be owed an extra day’s pay because they have worked an extra day.
Salaried workers
Where a member of staff is on a fixed annual salary and is paid, for example, 1/12th of that salary each month, regardless of the number of days in that month, they will not be entitled to be paid for working the extra leap-year day. However, if you are paying salaried workers a relatively low annual salary, you must still ensure that the extra day does not take a person’s pay below the National Minimum Wage (NMW). Under the NMW regulations, the correct minimum rate will depend on the age and status of the worker as follows:
- For workers aged 23 and over: £10.42 per hour
- For workers aged 21-22: £10.18 per hour
- For workers aged 18-20: £7.49 per hour
- For workers aged under 18: £5.28 per hour
- For apprentices: £5.28 per hour (if under 19 or 19+ but in their first year).
Employers must ensure they continue to meet National Minimum Wage rates and do not pay below the relevant statutory minimum as a result of staff working the extra leap-year day for no extra money.
Can employees be forced to work the extra leap-year day?
When it comes to staff being forced to work the extra leap-year day — as with the employer’s potential obligation to pay someone for working this day, either if an employee is paid on an hourly rate and would not otherwise be working this, or if they are salaried but there is contractual provision for this — this is simply a matter of contract. As such, if an individual is normally required to work 5 days a week or to work a Thursday as part of any shift pattern, or the extra leap-year day falls on any day that they would usually be required to work, then they are contractually bound to come into work that day.
Some employees may ask to take this additional day as part of their annual leave entitlement, although any request not to work on 29th February 2024 will, as with any other annual leave request, be at the employer’s discretion. While employees have a statutory (or contractual) right to a minimum number of paid days’ leave each year, it is up to the employer when these days are taken to meet the operational needs of the business. There is also no automatic legal entitlement to have the leap-year day off as paid leave, without this being deducted from any accrued holiday entitlement.
Pay disputes
There are various practical and legal risks for employers that are associated with getting it wrong when it comes to the question of “Do you pay employees more in a leap year?”
Practically speaking, if you fail to pay an employee what they expect and are contractually entitled to be paid, this can create significant conflict at work. The employee will either be forced to accept the pay mistake, although this is likely to damage the working relationship, or be forced to make a complaint. However, as pay is an incredibly emotive topic in the workplace, as soon as someone thinks they are being underpaid, they are likely to make a beeline for their manager or payroll. Equally, if any complaint cannot easily be resolved, the employee may go on to lodge a formal grievance. This will require you to fully investigate the matter, providing written reasons and a right of appeal if the grievance is not upheld.
If a worker’s grievance is not upheld, where that individual remains adamant of their right to be paid for working the leap-year day, this may quickly escalate into a complaint before the employment tribunal for unlawful deduction of wages, where an unlawful deduction includes where an employer has failed to pay a worker less than that person is legally entitled to. The worker could also claim breach of contract before the civil courts. In either scenario, even if you have a clear defence to any claim made, defending legal proceedings can be costly and time-consuming. It can also seriously damage any ongoing relationship.
In some cases, where an individual is not paid what they are owed, or what they think they are owed, not least where any complaint cannot be resolved internally, this can also result in an employee feeling forced to resign. Most employees will feel extremely strongly about not being paid the correct amount, where any failure to pay what they are contractually entitled to be paid could potentially result in a claim for constructive dismissal.
Finally, it is worth noting that where any failure to pay employees more for a leap year in breach of the NMW regulations, this is a criminal offence for which you can be fined and publicly named. You will also be required to immediately pay any outstanding arrears.
How should employers deal with any leap-year pay complaints?
The way in which any pay complaint should be dealt with will depend on whether a complaint is made on an informal or formal basis. If an informal complaint is made, you will need to be able to quickly rectify any pay error, provided the worker is contractually entitled to be paid for working the leap-year day. Alternatively, where there is no obligation on you as the employer to pay the complainant for the extra day, you should be prepared to explain with some level of empathy, given the employee’s expectations, why this is the case.
If a pay complaint is made on a formal basis, or an unresolved informal complaint has been escalated into a formal grievance, you will need to follow your workplace grievance procedures. As with any grievance, this must adhere to the guidance given by Acas Code of Practice on Disciplinary and Grievance Procedures. In particular, you must investigate the matter promptly and fully. You must also provide the complainant with the opportunity to have their say at a grievance hearing, providing written reasons for your decision, together with a right of appeal in the event that the pay complaint is not upheld in full.
As word tends to spread quickly in the workplace, it is important that you address any complaint around pay as quickly and efficiently as possible. It may also be worth sending a workforce-wide memo to nip any further complaints of a similar nature in the bud.
How to avoid leap-year pay complaints
Paying an employee the right amount can be key to ensuring that complaints are not made, where complaints of this nature can quickly escalate into contested disputes before a tribunal or the courts. As such, it is important for employers to check in advance what contractual entitlement, if any, each member of staff has to be paid for working the leap-year day. As it only happens once in every four years, the extra day that comes with a leap year can easily catch employers out when it comes to paying their employees.
It is also important to bear in mind that for those who have no legal right to be paid for working an extra day in February, that this may feel like an additional burden in an already stressful working environment. Importantly, all employers are under a statutory duty to ensure the health and wellbeing of their employees at work, including ensuring that they are not being overworked or overburdened. As such, even if working the extra day in February does not affect someone’s pay entitlements as a matter of law, you may still want to consider the emotional benefits of remunerating your staff as a gesture of goodwill. This does not necessarily have to be by way of a pro-rated day rate (based on their annual salary), but the additional time could be paid back to the worker as time off in lieu.
Alternatively, to set expectations for staff who will not be paid any extra, you should ensure that staff are made aware of this in advance. Any reputable employer should already have in place a strong workplace policy when it comes to pay, clearly outlining your payment terms, such as how any annual salary works and when this will be paid. However, many salary policies will omit any reference to how a leap year impacts an employe’s obligations to work or, more importantly, their entitlement to be paid for this extra work. It is only one extra day every four years, but this can still give rise to ongoing conflict and workplace problems if not adequately addressed by employers, where the key is clear communication.
By setting employee expectations before they are required to work this extra day, and well before they expect to be paid for working this day, this can help to preempt any concerns that employees will inevitably have on this issue. While what you have to say about leap-year pay may come as a disappointment to staff, once they understand the legal basis for this, ie; where their salary is set annually, this will help to minimise the risk of complaints.
Need assistance?
For advice on any aspect of employee entitlements, such as the rules on pay during a leap year, contact us.
Last updated: 30 January 2024
Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
