Holiday Pay Adjustment (HPA) A Guide for Employees and Line Managers

Transcription

1 Holiday Pay Adjustment (HPA) A Guide for Employees and Line Managers What is Holiday Pay? Holiday pay is the money you receive when you re taking your holiday entitlement. At Telefonica UK Limited the number of contractual holidays you get paid for depends on number of factors, including your grade and your length of service. We also pay you for public and bank holidays. If you re unsure what your holiday entitlement is, you should refer to your employment contract or speak to your manager. What is Holiday Pay Adjustment? Holiday Pay Adjustment means that overtime, certain allowances and commission plans will be included in the first 20 days of leave taken in any holiday year. This does not include bank holidays. These 20 days are often referred to as directive days as they are the holiday entitlement agreed by legislation. Please reference to the section on allowances and commission for information on what s included. Why is Holiday Pay Adjustment being paid now? As a result of recent judgements in a number of separate cases brought before either the European Court of Justice (ECJ) or the Employment Appeal Tribunal (EAT), which published conclusions that said holiday pay should include certain payments outside basic pay which reflect normal remuneration for an employee when taking annual leave. To put this simply, you should be no worse off financially by taking your holiday. So if you earn commissions, claim certain allowances or work overtime these will now be considered as part of your holiday pay adjustment payment. Why isn t all of my holiday eligible for Holiday Pay Adjustment? The ruling regarding the inclusion of payments for overtime and certain other types of variable pay in holiday pay only applies to the first 20 days of leave in any holiday year,. These 20 days exclude any bank and public holidays. Although Telefonica UK Limited has holiday entitlement in addition to this, the additional holiday entitlement in excess of the 20 days isn t affected by the ruling so you would not receive a holiday pay adjustment payment for your remaining holiday allowance. I don t work paid overtime or have variable pay; will I be entitled to a holiday pay adjustment? We all receive holiday pay as a part of our basic salary and this is unaffected. You won t receive holiday pay adjustment if you don t have overtime or certain variable elements in your pay. Will my Time off In Lieu (TOIL) be affected by the Holiday Pay Adjustment? No, TOIL is not impacted by this change. How is the Holiday Pay Adjustment pay calculated? At the start of each month, the number of hours / days of annual leave taken in the previous calendar month is taken from Chorus. The eligible payments (i.e. any overtime, agreed allowances or commission plans) received by each employee in the three months before the leave month are checked. The total payments are multiplied by four, to obtain an annual figure, then divided by to obtain a weekly figure, then divided by the employees weekly contractual hours to give the hourly uplift rate (the extra holiday pay adjustment amount to be paid per week). 1080

2 Payment Calculation Period Rolling 3 Months (Reference Period) Month holiday taken Month holiday paid Eligible Payment days x 4 / / 36 hours = 2.30 holiday adjustment pay X hours = Example John works 36 hours per week. He took 2 days holiday in April. In January, February and March he worked overtime which totalled is multiplied by 4 to get 4,320 for the year, then divided by to get a weekly amount and then divided again by John s weekly hours (36), which means he is entitled to 2.30 per hour s holiday pay adjustment. This means John will received ( 2.30 x 14.4 hours) holiday pay adjustment payment for the two days holiday he has taken in April. When will Holiday adjustment pay be paid? The holiday pay adjustment will be paid in the month following the end date of the holiday. In the above example, holiday end-date was April so payment will appear in May s pay slip. What is the pay reference period? To be able to calculate your holiday pay adjustment, we need to look back at your previous earning, this is known as the reference period. At Telefonica your reference period is the previous 3 month pay slips before the month in which holiday is taken. How will we know what leave an employee has taken so that we can calculate the holiday pay adjustment? We will use Chorus to take get the information about the holidays you have taken. We will use this information to calculate the holiday pay adjustment amount. Therefore it s really important that your manager and Chorus has the right information If an employee works overtime and it varies from month to month; how will holiday pay adjustments be calculated? When we come to calculate holiday pay adjustment, we ll use the total earnings an employee received which may be made up of (overtime, allowances and commission) over the reference period. This will take account of any fluctuations in pay from month to month.

3 What overtime is included in HPA? Any overtime worked in the reference period will be captured in the calculations What allowance are included in HPA? Allowances that are included in HPA Gatekeeper Pay Element Additional Conditioned Hours Cover Daily On Call Monday to Saturday Daily On Call Sunday and Bank Holiday Hourly Shift 7 Day 24 Hour Type 01 Hourly Shift 7 Day 24 Hour Type 02 Hourly Shift 7 Day 24 Hour Type 03 Hourly Shift 7 Day Double Day Type 07 Hourly Shift 7 Day Double Day Type 08 Hourly Shift 7 Day Double Day Type 09 Hourly Shift Less Than 7 Day 24 Hour Type 04 Hourly Shift Less Than 7 Day 24 Hour Type 05 Hourly Shift Less Than 7 Day 24 Hour Type 06 Hourly Shift Less Than 7 Day Double Day Type 10 Hourly Shift Less Than 7 Day Double Day Type 11 Hourly Shift Less Than 7 Day Double Day Type 12 Nights Non Pensionable Nights Pensionable Overtime Overtime Sunday Saturday Overtime Single Rate Overtime STC Sub MPG To MPG Sunday Overtime Sunday WSH Supervisory LT Supervisory LT Pensionable Supervisory ST < 4 Hours Supervisory ST > 4 Hours Travel Travel Sunday Grade Family/Business Area Manager allowances that are included in HPA Gatekeeper Pay Element Abnormal Early Late Attendance Abnormal Night Attendance Grade Family/Business Area

4 Call Out Weekday 1 To 2 Hours Call Out Weekday 15 To 60 Min Call Out Weekday 2 To 3 Hours Call Out Weekday Over 3 Hours Call Out Weekend 1 To 2 Hours Call Out Weekend 15 To 60 Min Call Out Weekend 2 To 3 Hours Call Out Weekend Over 3 Hours Cover Night Allowance Non Pensionable Saturday Overtime STC MPG To MPG STC Sub MPG To MPG Sunday Overtime Unsocial Hours Saturday Type 01 Unsocial Hours Saturday Type 02 Unsocial Hours Saturday Type 03 Unsocial Hours Sunday Type 01 Unsocial Hours Sunday Type 02 Unsocial Hours Sunday Type 03 Unsocial Hours Weekday Type 01 Unsocial Hours Weekday Type 02 Unsocial Hours Weekday Type 03 What commission scheme is included? Sales commission and bonus that are earned only while at work, and where the employee suffers a drop in payments as a direct result of taking holiday are included. What s not included? Commission schemes such as those based on annual targets, where there is no direct drop in payments due to taking holidays, are not included. How will the holiday pay adjustment appear on my payslip? Your holiday pay adjustment payment will appear as a separate line on your payslips, it will be called HPA credit or HPA debit HPA credit will be used for any payments that have been made, and HPA debit will be used if we have to recover any overpayment made to you. Do I have to claim my holiday pay adjustment, or is it automatically paid to me? It s important that chorus is up to date with any planned holidays, then so long as you have entered all your overtime and claimed your allowances on Gatekeeper you will be paid the relevant holiday pay adjustment payment following your holiday. When does it start from? You will be entitled to a holiday pay adjustment for any holidays taken from the 1st January The first payments will be made in February 2018 pay slips. Will holiday pay adjustment be backdated? This new policy will be effective for any holidays taken from the 1st January What happens if I work part time e.g. 20 hours a week?

5 Your holiday pay allowance will be be pro-rated for part-time staff and for those who start or leave part way through the holiday year. Part-time staff who book their holiday in hours will have the following formula applied in order to convert hours into days (needed for the 20 day payment cap): Base Line = 37 hours contract = 7.4 hours x 100% = cap minus 1 day - 25 hours contract (67.5% of 37) = 67.5% x 7.4 = 5 hours holiday = cap minus 1 day - 16 hours contract (43% of 37) = 43% x 7.4 = 3.2 hours holiday = cap minus 1 day - 10 hours contract (27% of 37) = 27% x 7.4 = 2 hours holiday = cap minus 1 day What happens if an employee doesn t end up having a holiday day and doesn t cancel it on Chorus? It s really important that you and your line manager keep Chorus as up to date as possible to prevent any error. In the event that you don t cancel a holiday day on Chorus but later amend your record, we will recover any holiday pay adjustment that you will have been paid. If I ve got questions on how my holiday pay adjustment has been calculated, who should I call? Like all pay queries you should speak to the Payroll Helpdesk. The team can be contacted by calling Payroll helpdesk can also be reached on EPSC number Option 1. What happens if I leave and have taken too many holiday, will I have to pay back any overpayment for holiday pay adjustment? As part of the leaver s process we will claim back all overpayments for all leavers. What happens if I change grade during the holiday year? You will still be eligible for HPA if you earn any of the agreed elements linked to your grade i.e. overtime, allowances and commission. What happens if I change hours during the holiday year? Your holiday allowance will be adjusted as necessary depending on the change to your hours. When does Telefonica UK s holiday year run to and from? 1 st January until 31 st December. Is holiday pay adjustment payment pensionable? No, only your base salary is used for your pension, as the HPA allowance is earned on overtime, certain allowance and commission these are not pensionable. If an employee is on long term leave (e.g. maternity, long term sick leave). How Are they affected? The new holiday pay calculation will not affect the calculation of pay for employee on leave for reasons other than paid leave. Are agency worker eligible for holiday pay adjustment? This policy is for permanent Telefonica UK employees only. Workers employed by an agency should contact their employer for further advice.