Ignorance isn’t bliss…

Despite many small business around the country being blissfully unaware that the holiday entitlement for their employees was set to rise on April 1, the change has indeed hit the country – but what exactly has happened?

Well, although a survey taken by the IT company Humyo.com discovered that a staggering 65 per cent of small businesses weren’t aware that there were any changes taking place, employees are actually now entitled to a slightly more generous 5.8 weeks of paid holiday.

5.8 weeks, which works out at 28 days a year if the employee works five days a week, is a substantial rise from the previous 4.8 weeks which was the norm before Aril 1, which worked out at only 24 days a year.

The entitlement had already recently enjoyed a rise from 20 days to 24 days on October 1, 2007, but the Government seems to feel that we aren’t getting enough paid time out of the office and have jumped to our aid once again…

Balancing work and home life…

The move has come as the Government strives to strike more of a balance between employee’s work lives and home lives which they hope will allow employees balance their working roles with other responsibilities in their lives.

However, the news isn’t exactly welcomed by small businesses in Britain who are already struggling through the recession – the DTI are claiming that while larger companies will endure an increase in entitlements of around 11 per cent, medium businesses will see an increase of 16 per cent yet smaller businesses which employ fewer than 50 employees will see an increase of 25 per cent.

However, ignorance is not an excuse – there are a few things that small business managers need to keep in mind as the new entitlement rules come into effect.

•    Carrying Holiday Pay – Subject to mutual agreement between employees and employers holiday entitlement may be carried over into the next year.  However, in an attempt to cap the entitlement, a compulsory minimum of four weeks’ holiday must be taken each leave year.

•    Notification – The responsibility of informing employees resides with the employer under the Employment Rights Act 1996.  Get notifying – make sure staff are aware of what is going on.  Think of it as a morale booster…

•    Payment In Lieu – The right to provide employees with their payment in lieu is no off the table and is no longer allowed.  However the Government is allowing management the discretion to pay in lieu for contractual holidays that are over 28 days in length.

What now?  As the manager or owner of your small business you will need to be in a position to be able to deal with the increase in holidays – make sure that you plan well and you aren’t caught off guard when your employees decide to make the most of the extra time they are entitled to.

What do you think?

Do you think the Government was right to extend the employee holiday entitlement?  Is it too much, too soon?  Was it really a good move during an economic crisis?  Leave a comment and let us know what you think…

Our Random Articles

• Small businesses plan staff cuts in early 2012
• Unemployment rise – what does this mean for small businesses?
• The Mary Portas Review
• Experts Warn Small Firms of the Need to be More Aware of IT Security Risks
• SMEs Unprepared for New Pension Reforms

More Links