Workers are entitled to be paid during statutory annual leave at the rate of a 'week’s pay' for each week of leave. Many businesses base their calculation of holiday pay on basic salary. However, case law has indicated that this approach may not always be appropriate and that certain payments, such as commission and overtime, may need to be included.
Employers who operate a rolled-up holiday pay system should be aware of the risks, as this is technically unlawful.
You can’t make a payment instead of allowing a worker to take their statutory holiday, except on the termination of employment.
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