Carry over unused holiday into the new year with BrightHR
You can now carry over your staff's unused leave to the next holiday year with BrightHR. Not sure about holiday carryover legalities and the impact it could have on small businesses? Let us enlighten you.
You asked for it, we built it. Introducing our latest feature - Holiday carryover! This new functionality allows you to track your staffs unused annual leave and carry them over to the new holiday year's entitlement.
As we come to the end of yet another brilliant year, we see a lot of our customers in the same position, with several employees with annual leave days left unused, and not enough time for everyone to take their leave without the consequence of an empty, understaffed office.
Does this situation sound familiar? You’re not alone. Over 61% of businesses on BrightHR had staff with annual leave left unused at the end of their holiday year in December 2016. Wondering what most businesses do when this common situation arises? Well, some businesses enforce a 'use it, or lose it' policy in which case unused leave would be lost for the employee, other businesses allow their workers to sell back unused leave, and many simply allow holiday carryover.
Unsure about the legalities, and the impact holiday carryover could have on small businesses? let us enlighten you.
1. First things first, is holiday carryover legal?
Absolutely! Workers are entitled to minimum 5.6 weeks’ annual leave per year of which 4 weeks (the EU minimum leave) must be taken within the holiday year in which it is accrued. The remaining 1.6 weeks and any additional entitlement that you give within your business may be carried over to the following year, if of course you agree to it and include in your company policy or agree to it in writing on an individual basis.
Here’s a brief example of the above: If you give someone who works 5 days a week 28 days’ annual leave (i.e. 5.6 weeks) they are legally able to carry 8 days into the next holiday year. But only if you wish this to be the case and it is confirmed in writing to the worker.
2. Is holiday carry over mandatory?
As an employer you don’t have a statutory obligation to allow your staff to carry over their holiday. This is simply something that you can agree to, or deny, It’s entirely up to you.
If you don’t want your workers to carry over their remaining entitlement at the end of the year, you should include a ‘use them, or lose them’ statement in your contracts and/or handbook.
NB. this may not be the case if someone is on long term sickness, or family related leave. If you have questions about this, speak to our experts at BrightAdvice.
3. Can you limit the amount that can be carried over?
Yes, you can include a limit of days that can be carried over within your holiday carry
over policy. This is entirely up to you as an employer but you must bear in mind that the first 4 weeks of a worker’s leave cannot legally be carried over in normal circumstances as mentioned above.
4. Is carrying over holidays a good idea for SME's?
All businesses are different in which case there are both pros and cons to allowing holiday carryover, or not. We explore the pros and cons below:
Avoids the issue of the holiday booking rush in December. This is when your workers are all trying to use up their left over annual leave before the holiday year end. This can often lead to a understaffed workplace, which in some industries can cause major issues.
Allows staff to plan ahead, and shapes a company culture that promotes understanding and flexibility. For example, if someone knows that they need additional leave for the following year, because they’re planning a long vacation, them knowing that they can save and carry over unused leave from the current year could be seen as a real benefit.
Not Allowing Carryover
Avoids burnout. Annual leave entitlement is there for a reason, so that your workers can have a break from work. By encouraging holidays to be carried over, and not taken within that holiday year this could have negative effects on workers’ health and wellbeing.
Encourages workers to plan and book in their leave with plenty of advance notice because they know they will lose it if they don’t.
5. Are your staff using all their annual leave?
It’s a good idea to track and manage staff annual leave throughout the year, and that all your workers have access to their remaining leave balance. This way, you avoid the situation of getting to the end of the holiday year and having workers realise that they have 10 days left to take! With BrightHR, you're staff have easy online access to their holiday balance, and you’re able to easily access and monitor your workers holidays, which is super handy for when it comes to sending out the occasional reminder to let workers know how much holiday they have left, and when they need to use it by if you don’t permit holiday carryover.
So, how can BrightHR help you manage holiday carryover?
If you do allow your staff to carry over annual leave to the following year, it can be a complicated process if you don’t have a good system in place. With BrightHR you can key in how many days each worker is carrying over, and this will be added to their balance for the following year. Simple! BrightHR also gives a clear and transparent view of how many holidays your staff have available, and how many were carried over from the previous year.
But, what if your workers work in hours and not days?
Not a problem. For variable hours worked, it will simply show the balance and carry over entitlement in hours instead of days.
Here's how to use 'Holiday Carryover' in BrightHR
1. Carryover will be disabled by default. To enable it, log into BrightHR as an admin, go to settings > company, and simply click 'enable' and update.
2. Once enabled, admins and managers can manually add an amount of carryover holidays to an employee's entitlement for the selected years leave. To do this, click the 'Update Carryover' link found on each employees profile via the absence panel. Add and confirm the carryover amount for the employee and click save. Once saved, the amount of carryover will be displayed under their holiday entitlement for the selected leave year.
3. Every time you update an employee's carryover, their personal dashboard will be updated to reflect their carryover entitlement! Easy.
Did you know 77% of our customers on BrightHR run their holiday year from January - December. If this includes you, make sure that you’re well prepared for the new holiday year.
Not a BrightHR customer? Request your free demo today and we can show you how easy it is to manage your staff holidays, absences and lateness all in one place. Let us do the HR for you.