Should I let my staff carry over their holidays?

Here’s everything you need to know if your employees still have annual leave to take before your holiday year ends.

BrightHR Team

It’s a common occurrence at the end of every holiday year. Employees have holiday allowance left to take, but there’s little time left 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 ran from 1st January to 31st December on their staff holiday planner), 77% still had holiday allowance remaining at the end of October 2019. And 59% of them had no option to carry it over into 2020.

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 the holiday year ends? Let’s take a look…

The legal stuff

There are two types of annual leave you need to know about:

  • Statutory annual leave entitlement is usually the first four working weeks of an employee’s overall annual leave entitlement. For example, if your employee works a typical five-day week, this would work out at 20 days.
  • Non-statutory annual leave entitlement is any additional annual leave above the statutory requirement. For example, you might decide to give your employee a total of 25 days’ holiday, so the extra five days are non-statutory.

So can staff carry over statutory annual leave?

Yes, if employees have any outstanding statutory annual leave (that’s those first four weeks we just mentioned) they can carry it over—so long as they use it in the first six months of the following holiday leave year.

But you must get the employee’s consent first. This protects employees from being overworked, and protects you from any potential claims that they weren’t ‘allowed’ to take time off.

And what about the non-statutory annual leave?

If an employee has any non-statutory annual leave remaining (like the extra five days in the example above) then this can also be carried over, but it isn’t the law— it’s up to you, the employer, whether you allow your staff to do this.

The exceptions to the rule

These rules don’t apply in the following situations:

  • If your employee can’t take their holidays because they’re on certified sick leave, you must allow them to carry over their statutory annual leave entitlement (for up to 15 months after the leave year has ended).
  • If your employee can’t take holidays because they’re on statutory family leave (e.g. 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 you’re unsure about any carryover rules, make sure you get advice to help you get it right.

The PROS of carryover

Letting staff carry over holidays can help to avoid the rush of everyone manically booking their holidays before the year’s end—and it can be tough for a small business to have so many people off at the same time.

Carryover 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 them.

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’s your responsibility 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 on carryover you should set it 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 before your holiday year comes to a close.

Where to go from here

If you have a question that we haven’t answered, our HR experts are just a phone call away. They can answer all your carryover questions, and are available to take your call 24/7.

Call BrightAdvice today on 1800 279 841.