Calculating part-time workers’ holiday entitlement can quickly become a complicated matter. However, employers are under an obligation both to ensure term-time workers receive at least the statutory minimum entitlement of 5.6 weeks’ paid annual leave a year, and that they are not treated less favourably than full-time workers.
The following guide for employers examines the rules relating to term time only contracts holiday pay, including pay reference period rules relating to workers without fixed hours or fixed pay.
Who is classed as a term time worker?
A term time worker is someone who is contracted to work a certain number of weeks per year, where their non-working time is scheduled at regular, planned periods and is accounted for by a combination of annual leave and unpaid leave.
There are various different types of term time worker depending on the specific nature of their contract. A term time worker can be employed on a full-time or part-time basis, and under a permanent or temporary contract. A term time worker can even be employed intermittently, working during term time periods as and when the need arises.
Where employed under either a full-time or part-time permanent contract, the worker should usually be paid their normal weekly rate of pay for all school holiday periods. However, other term time workers will only usually be paid for hours actually worked and so not during school holiday periods. This includes:
- Workers paid by the hour
- Supply teachers provided by an agency
- Temporary workers on a short term contract
- Workers on a zero hours contract
Term time holiday accrual
The leave year can be set by the employer, for example, to run from 1 January to 31 December, during which time the worker must take their leave entitlement, although often the contract of employment will only allow workers to take their annual leave during the school holidays.
In the absence of any express contractual entitlement to paid holiday, the term time worker will begin to accrue the statutory minimum as soon as they start their term time job.
If the worker started their job part way through the leave year, they will only be entitled to the part of their total annual leave entitlement accrued for that year. Where a statutory leave year has not been set, this will start on the first day of a new job. For term time workers on permanent contracts, the statutory entitlement to paid holiday accrues in exactly the same way as those employees who work all year round, namely, monthly in advance at a rate of 1/12 of their annual entitlement.
Term time holiday entitlement
With the exception of those who are genuinely self-employed, all workers are legally entitled to 5.6 weeks’ paid holiday per annum. For someone working full time, 5 days a week, this equates to a total of 28 days a year, although bank holidays and public holidays can be included as part of that statutory leave entitlement.
For term time workers who are not retained by their employer between periods of work, for example, they are paid by the hour, work as a supply teacher, or are working under a short term or zero hours contract, the position was clarified by the government through legislation in 2024.
To simplify holiday entitlement and pay calculations for employers, changes to the Working Time Regulations came effect from 1 April 2024. Holiday leave can now be calculated in hours rather than weeks, allowing for more accurate assessments based on actual working time. Holiday for term-time workers is accrued at the rate of 12.07% of the actual hours worked during each pay period. This percentage represents the proportion of statutory holiday entitlement relative to the working year.
Holiday pay entitlement
Employers have two main options for calculating and paying holiday leave for irregular or part-year workers. Holiday pay can either be given when leave is taken, calculated at a rate equivalent to a week’s pay for each week’s holiday entitlement or, alternatively, employers can use the 12.07% calculation method, where holiday entitlement is based on hours worked during the prior pay period, with the option to pay rolled-up holiday pay.
These changes apply only to statutory minimum holiday entitlement (5.6 weeks). Any additional leave granted by employers beyond statutory requirements will be governed by the relevant contractual terms.
Term-time workers typically take their holiday during non-working periods, such as school breaks. However, with the updated rules, employers may align holiday accrual with pay periods, simplifying both entitlement and payment processes.
Need assistance?
DavidsonMorris’ employment law specialists are experienced in all aspects of workforce entitlements, including issues relating to holiday pay and workers with flexible working arrangements. For advice, contact our employment law specialists.
Term time holiday FAQs
What is a term-time only contract?
A term-time only contract is typically used for roles in schools or educational settings, where employees work only during term time and have non-working periods during school holidays.
Are term-time only workers entitled to holiday pay?
Yes, term-time only workers are entitled to holiday pay. Their entitlement is based on the number of hours they work and is calculated pro rata to ensure fairness compared to full-time employees.
How is holiday pay calculated for term-time workers?
From 1 April 2024, holiday pay for term-time and part-year workers can be calculated as 12.07% of the hours worked in a pay period. Employers may also opt to pay holiday pay when leave is taken or include it as part of rolled-up holiday pay.
Do term-time workers receive the same holiday entitlement as full-time employees?
Term-time workers are entitled to the statutory minimum of 5.6 weeks’ holiday per year, but this is adjusted (pro rata) based on their actual working hours across the year.
Can holiday pay be included in my regular salary?
Yes, employers can provide rolled-up holiday pay, which includes your holiday entitlement as part of your regular pay. This must be clearly communicated and separated in your payslip.
What happens if I leave my term-time job partway through the year?
If you leave your role mid-year, you are entitled to payment for any unused holiday entitlement accrued up to your leaving date.
Does the new 2024 holiday pay rule affect all term-time workers?
The new rules apply to part-year and irregular workers, including term-time staff. However, any additional holiday entitlement beyond the statutory 5.6 weeks will depend on your employer’s local policies.
Can I carry over unused holiday into the next year?
Unused holiday is usually not carried over unless your employer’s policy allows it or there are exceptional circumstances, such as illness. Check your contract for specific details.
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 500 and 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
