Should I let my staff carry over holidays into next year?

Here’s everything you need to know if your employees still have annual leave to take before the end of the year.

BrightHR Team

It’s that time of year again. Employees have holiday allowance left to take, but there isn’t much time left in the year to take it. If this sounds like your business, you’re not alone…

Did you know?

Out of a quarter of a million BrightHR users (whose holiday year runs from 1st January to 31st December 2019 on their staff holiday planner), 77% still have holiday allowance remaining this year. And 59% still have holiday remaining with no option to carry it over to next year.

 So what are you supposed to do? Let employees carry over annual leave into the next year, or encourage them to take it all before Big Ben rings in 2020?

The simple answer is—yes and no (okay, not quite so simple). But we’ll make it easy for you. Let us explain…

The legal stuff

First things first, let’s look at the law.

UK annual leave entitlement is set by the Working Time Regulations 1998, and states that workers are entitled to a minimum of 5.6 working weeks of paid annual leave every year. For someone who works a typical five-day week, this works out as 28 days’ holiday per year.

However, the first four weeks (20 days) are granted through the EU Working Time Directive—and it’s this time that holiday carryover rules apply to.

However, it’s a bit different if you’re in the Republic of Ireland. Annual leave is set out by the Organisation of Working Time Act 1997 and the holiday year runs from 1st April to 31st March. So while you might not have staff rushing to book holidays before the New Year, you might do when February and March comes around—so it’s worth planning ahead.

Can staff carry over the first four weeks of their entitlement?

No, this annual leave can’t be carried over into the following year. The law says that the first four weeks of annual leave must be taken in the year that they were accumulated (whether that year is January-December or April-March).

What about the remaining holiday allowance?

Yes, the remaining 1.6 weeks (minimum) can be carried over. But this isn’t the law— it’s up to you, the employer, whether you allow your staff to do this.

The exception to the rule

These rules don’t apply in the following situations:

  1. If your employee can’t take holidays because they’re on sick leave, you must allow them to carry over their annual leave—up to a maximum of four weeks.
  2. If your employee can’t take holidays because they’re on maternity leave, you must allow them to carry over the whole of their remaining annual leave into the following year.

But remember, every situation’s different, so it’s important you get advice if you’re unsure about annual leave, to make sure you get it right.

So, should I allow employees to carry over holidays?

While you need to consider your company policy and any reasons why your employee can’t take their annual leave in the same year (such as the reasons set out above), whether you allow employees to carry over holiday leave or not is your call.

Let’s look at the pros and cons…

The PROS of carryover

Letting staff carry over holidays can help to avoid the rush of everyone manically booking their holidays in December before the year’s end.

It can be good for staff morale, too. Letting staff take extended holidays for such things as a house move or an extended honeymoon shows your staff that you value they have personal lives outside of work.

The CONS of carryover

On the flip side, holiday allowance is there for a reason—to allow staff time to rest and recuperate properly. So carrying over holiday allowance could leave staff worn out in the meantime.

Holiday carryover can also be costly for a small business. It could mean a lot of your workforce taking time off next year, which might leave you short-staffed at busy times.  

Remind staff of the rules

Remember, it is up to you as the employer to make sure your staff are getting the right amount of annual leave. If you don’t allow staff to take their holidays, they could make a claim against you, so whatever you decide about holiday carryover should be set out in your company policy or employee contracts.

If you haven’t already done this, maybe send out an email to your staff to remind everyone of the carryover rules as the year comes to a close.

Where to go from here

If you need help working out holiday carryover, our staff holiday planner makes it a doddle.

And if you have a question that we haven’t answered, we’re just a phone call away. Our HR experts can answer all your carryover questions, and our helpline is open 24/7.

Call BrightAdvice today on 0800 783 2806.