Keep Your Team on Track: Essential Rules for Carry-Over Leave Management

If your Holiday Year spans 1st January to 31st December, January is a crucial month for annual leave management. Employees are eager to submit holiday requests and ensure any accrued leave from the previous year is carried over. This is an ideal time to review your contracts and employee handbook to ensure compliance and effectiveness.

Since 1 January 2024 the following principles relating to the carryover of annual leave apply:

Workers can normally carry over a maximum of 8 days into the next leave year, with the agreement of their employer.

If a worker gets more than 28 days’ leave, their employer may allow them to carry over any additional untaken leave. Check the employment contract, and company handbook to see what the rules say.

If any worker is unable to take some or all of their statutory holiday entitlement as a result of taking a period of maternity or other family related leave, then they will be entitled to carry forward up to 28 days of their untaken leave into the following leave year.

If a worker working regular hours and all year round is unable to take some or all of their statutory holiday entitlement as a result of being off sick, then the worker will be entitled to carry forward up to 20 days of their untaken leave into the following leave year, provided it is then taken by the end of the period of 18 months starting from the end of the leave year in which it was accrued. These 20 days should be paid at the ‘normal’ rate.

An irregular hour’s worker or part-year worker will be entitled to carry over up to 28 days of leave in these circumstances. Again, this worker would need to use that leave they have carried over within 18 months starting from the end of the leave year in which it accrued.

An employer must allow a worker who is unable to take their statutory holiday entitlement as they are on maternity or other family related leave to carry over all their holiday entitlement to the following leave year.

A worker will be entitled to carry forward into the next year the leave that they should have been entitled to take if:

• the employer has refused to recognise a worker’s right to annual leave or to payment for that leave
• the employer has not given the worker a reasonable opportunity to take their leave and encouraged them to do so; or
• the employer failed to inform the worker that untaken leave will must be used before the end of the leave year to prevent it from being lost

Workers with regular hours may carry over up to 20 days of their leave, accrued but untaken for these reasons, and irregular hours or part-year workers can carry over all of their entitlement.

The above scenarios should be avoided as it is important that workers are able to take their annual leave. This is to enable workers to rest from carrying out the work they are required to do under their contract of employment.

For expert guidance and practical support on leave carry-over within your business, please reach out to The HR Team.

 

Maximising Performance and Pay: The Highs and Lows of Linking Salary Reviews to Performance Evaluations

In the evolving landscape of employee management, one topic that continually garners attention is the practice of linking salary reviews to performance reviews. This strategy, while beneficial in many respects, also carries certain drawbacks. Let’s explore both the advantages and disadvantages of this approach to help you make an informed decision for your organisation.

Advantages

Motivation and Productivity: Linking salary to performance can serve as a significant motivator for employees. When employees know that their efforts directly influence their compensation, they may be more inclined to increase productivity and efficiency. This can lead to a more dynamic and driven workplace environment.

Performance-Based Pay: This system rewards high-performing employees, ensuring that those who contribute the most to the company are compensated accordingly. This performance-based approach can help retain top talent and foster a culture of excellence.

Objective Assessment: Combining salary and performance reviews can promote a more objective evaluation process. By aligning compensation with measurable performance metrics, organisations can reduce biases and subjectivity in salary decisions.

Goal Alignment: When employees understand that their salary increases are tied to their performance reviews, they are more likely to align their goals with the company’s objectives. This can enhance overall organisational performance and drive business success.

Disadvantages

Pressure and Stress: The pressure to perform for a higher salary can lead to increased stress and anxiety among employees. In some cases, this may result in burnout and decreased job satisfaction, which can negatively impact overall performance.

Short-Term Focus: Linking salary to performance may encourage employees to focus on short-term achievements rather than long-term goals. This can be detrimental to strategic initiatives that require sustained effort over time.

Risk of Unfair Evaluations: Despite efforts to maintain objectivity, performance reviews can sometimes be influenced by biases or inconsistencies. If employees perceive the evaluation process as unfair, it can lead to resentment and decreased morale.

Limited Collaboration: When compensation is tied to individual performance, employees might be less inclined to collaborate with their colleagues. This can hinder teamwork and the sharing of knowledge, which are crucial for innovation and problem-solving.

Conclusion

Linking salary reviews to performance reviews presents a blend of benefits and challenges. While it can drive motivation, reward high performers, and promote alignment with organisational goals, it also has the potential to increase stress, encourage short-term thinking, and create perceptions of unfairness. It’s essential for Business leaders and HR professionals to carefully consider these factors and implement measures to mitigate the downsides while maximising the benefits. A balanced and transparent approach can help ensure that this strategy supports both employee satisfaction and organisational success.

By weighing these pros and cons, your organisation can better navigate the complexities of compensation management and foster a more positive and productive work environment. For further advice and tailored solutions, contact The HR Team.

 

Minimum Wage Set to Rise in April 2025 – Are You Ready?

In a significant move to boost wages for millions of workers, the UK government has announced a substantial increase in the National Minimum Wage (NMW) and National Living Wage (NLW) set to take effect from 1st April 2025.

Key Changes:

• National Living Wage (21 and over): Increase from £11.44 to £12.21 per hour, a 6.7% rise.
• 18-20 Year Olds: Increase from £8.60 to £10.00 per hour, a 16.3% rise.
• 16-17 Year Olds and Apprentices: Increase from £6.40 to £7.55 per hour, an 18% rise.

These changes are expected to impact over three million workers across the UK, providing a much-needed pay boost to lower earners. Chancellor Rachel Reeves emphasised that this increase is a step towards delivering a genuine living wage for working people.

Deputy Prime Minister Angela Rayner added, “A proper day’s work deserves a proper day’s pay. Our changes will help millions of lower earners cover the essentials and provide the biggest increase for 18-20-year-olds on record.”

Employers are encouraged to use the government’s minimum wage calculator to ensure compliance and avoid potential underpayments. The Low Pay Commission, which recommended these increases, highlighted that the new rates will secure a real-terms pay increase for the lowest-paid workers.

While the wage increase is welcomed by many, some businesses have expressed concerns about the potential impact on their cost base. However, the government remains confident that the economic benefits will outweigh these challenges.

This move is part of a broader strategy to improve living standards and support economic growth by investing in the workforce.

Contact The HR Team for further information and practical support to ensure your business is ready for the April minimum wage increases.