Holiday pay in hourly rate - legal?

KpsCowley

[font=arial, sans-serif]I have a new contact that states that my holiday pay is included into my hourly rate, and therefor I am not due any remuneration for days taken as holidays during the year. I think this is known as rolled-up holidays.
[/font][font=Calibri, sans-serif]
"As you receive a fully inclusive hourly rate (base rate and holiday pay) no further remuneration is due for holidays. "
[/font][font=arial, sans-serif]
Does anyone know if this is even legal in Ireland? Is being paid for holidays at the time taken a statutory entitlement?

Thanks.
[/font]

davo10

As long as it is your contracted pay plus the equivalent of 20 days leave during a 12 month period, then what's the issue? You are still being paid your holiday leave entitlement.

Guffy

So you're getting paid 108% per hour? I assume you are allowed to take 20 days unpaid leave. Seems like a ****ty way to do it tbh

CIARAN_BOYLE

KpsCowley wrote: »

[font=arial, sans-serif]I have a new contact that states that my holiday pay is included into my hourly rate, and therefor I am not due any remuneration for days taken as holidays during the year. I think this is known as rolled-up holidays.
[/font][font=Calibri, sans-serif]
"As you receive a fully inclusive hourly rate (base rate and holiday pay) no further remuneration is due for holidays. "
[/font][font=arial, sans-serif]
Does anyone know if this is even legal in Ireland? Is being paid for holidays at the time taken a statutory entitlement?

Thanks.
[/font]

Well they need to ensure you actually take holidays but yeah it's a legal way of doing it. Sucks if you don't know going in as you are getting less than you thought you would be as you must make provision.

Obviously the pay needs to be at least 108% of minimum wage.

KpsCowley

Thanks for the replies guys. Yes I only found out after starting employment, yes the hourly rate is more than 108% minimum, buts its a pain as I thought I would be getting the 30 days paid holidays instead of being unpaid. I just wanted to check that it is legal before I signed the contract. Ohh well, will just have to accept it then

Guffy

Does it not have to be 108% of your stated wage? Not the minimum wage

Stheno

KpsCowley wrote: »

Thanks for the replies guys. Yes I only found out after starting employment, yes the hourly rate is more than 108% minimum, buts its a pain as I thought I would be getting the 30 days paid holidays instead of being unpaid. I just wanted to check that it is legal before I signed the contract. Ohh well, will just have to accept it then

You're only entitled to 20 days holidays as statutory if you work full time, not 30

OldMrBrennan83

This post has been deleted.

Kristopherus

Stheno wrote: »

You're only entitled to 20 days holidays as statutory if you work full time, not 30

Minimum entitled is 20 working days. But I'm surprised the OP is being offered 30 days.

pilly

KpsCowley wrote: »

Thanks for the replies guys. Yes I only found out after starting employment, yes the hourly rate is more than 108% minimum, buts its a pain as I thought I would be getting the 30 days paid holidays instead of being unpaid. I just wanted to check that it is legal before I signed the contract. Ohh well, will just have to accept it then

30 days holidays? I want that job!

Mrs OBumble

Patww79 wrote: »

Yeah that's what I was thinking too. The OP never said they were on minimum wage so it would need to be 108%of what their hourly rate is?

But the hourly rate includes the holiday pay so its circular to say it needs to be 108% of itself.

Legally it must be at least 108 % of minimum wage. After that it comes down to negotiation about the value of the job.

KpsCowley

My hourly rate is above 108% minimum wage. My hourly rate is at the industry standard for my experience and expertise, but my company are well known to be cheap and use tricks like this to save cash. The portion of holiday pay within my hourly rate is 15%, but this figure is just arbitrary. If I want to go on holiday, it makes more sense for me to use statutory sick leave.

Mrs OBumble

KpsCowley wrote: »

. If I want to go on holiday, it makes more sense for me to use statutory sick leave.

I guess you are not in Ireland then, because there is no statutory sick leave (paid or unpaid) here.

HONKEY TONK

KpsCowley wrote: »

My hourly rate is above 108% minimum wage. My hourly rate is at the industry standard for my experience and expertise, but my company are well known to be cheap and use tricks like this to save cash. The portion of holiday pay within my hourly rate is 15%, but this figure is just arbitrary. If I want to go on holiday, it makes more sense for me to use statutory sick leave.

You are already paid your holiday pay in your wages.

Do you want to use your Sick leave for holidays so you get double pay?

Kristopherus

Kristopherus wrote: »

Minimum entitled is 20 working days. But I'm surprised the OP is being offered 30 days.

pilly wrote: »

30 days holidays? I want that job!

20 days plus 9 public hols I expect.

Deise Vu

Just to clarify, minimum wage is €9.25 per hour so the 'holidays inclusive' hourly rate should be at least €9.99 to comply with the law. If your hourly rate was agreed at a €10.00 and afterwards they said they would pay you holiday pay as you went along, then you should be getting €10.80.

That seems like a horrible way to do business but I can actually see where it would suit some situations. If you are not working full-time and are required 'as and when' then it ensures you are getting your holiday pay. EG if you are a relief worker for, say, absent truck drivers, or are number 10 in a list of people who get called on a busy night to work in a restaurant, then there is a real pain in the ass for the employer and the employee to track holiday pay.

It wouldn't be for me, mind.

KpsCowley

34 days holiday in total, but all are essentially unpaid. HONKEY TONK suggested that this is double pay, but it really isn't. 

Working for an equivalent company, I would get the same rate, and paid holidays.

Stheno

KpsCowley wrote: »

34 days holiday in total, but all are essentially unpaid. HONKEY TONK suggested that this is double pay, but it really isn't. 

Working for an equivalent company, I would get the same rate, and paid holidays.

Is this in Ireland?

nosilver

Saw this and had to register.

Under the Organisation of Working Time act 1997, It is not legal to pay staff in lieu of holiday.

You are also entiltled to be paid for all bank holidays once you have worked for 40 hours or more in the 5 weeks prior.


Too many people just accept what a company says. Effectively they are swindling you out of 8% of your wages.

pilly

nosilver wrote: »

Saw this and had to register.

Under the Organisation of Working Time act 1997, It is not legal to pay staff in lieu of holiday.

You are also entiltled to be paid for all bank holidays once you have worked for 40 hours or more in the 5 weeks prior.


Too many people just accept what a company says. Effectively they are swindling you out of 8% of your wages.

No-one said that he was getting paid "in lieu" of holidays. He's getting his holidays, he just gets paid the extra 8% in his basic and doesn't get paid when he's off. It's perfectly legal although it's more common in jobs that are part-time or casual.

Deise Vu

nosilver wrote: »

Saw this and had to register.

Under the Organisation of Working Time act 1997, It is not legal to pay staff in lieu of holiday.

You are also entiltled to be paid for all bank holidays once you have worked for 40 hours or more in the 5 weeks prior.


Too many people just accept what a company says. Effectively they are swindling you out of 8% of your wages.

But they are not paying 'in lieu', they are just paying in advance? They would still have to give him his 20 days off, but he would have to save 8% of his wages every week to have any holiday pay.

It seems a strange way to go about it and I don't know if it is even legal. On the other hand, I once saw a Restaurateur's correspondence with the WRC over staff holiday and bank holiday pay and it was a nightmare calculation. The Restaurateur was telling them that by any of the WRC calculation methods she was overpaying the staff with regard to holiday / bank holiday pay but the WRC Gnome was still insisting on more and more calculations and proof of payment.

This was for part-time staff and the upshot was the Restaurant effectively ending up paying staff holiday pay at fixed times during the year rather than when staff were actually going on holidays.

pilly

Deise Vu wrote: »

But they are not paying 'in lieu', they are just paying in advance? They would still have to give him his 20 days off, but he would have to save 8% of his wages every week to have any holiday pay.

It seems a strange way to go about it and I don't know if it is even legal. On the other hand, I once saw a Restaurateur's correspondence with the WRC over staff holiday and bank holiday pay and it was a nightmare calculation. The Restaurateur was telling them that by any of the WRC calculation methods she was overpaying the staff with regard to holiday / bank holiday pay but the WRC Gnome was still insisting on more and more calculations and proof of payment.

This was for part-time staff and the upshot was the Restaurant effectively ending up paying staff holiday pay at fixed times during the year rather than when staff were actually going on holidays.

The calculations are a nightmare for part-time and casual workers and that's why it's included in the pay for some. Usually it's smaller companies though that do this.

Doesn't sound like OP's company is a small one or that's he's part-time or casual.

pilly

KpsCowley wrote: »

34 days holiday in total, but all are essentially unpaid. HONKEY TONK suggested that this is double pay, but it really isn't.

Working for an equivalent company, I would get the same rate, and paid holidays.

34 days holidays is ridiculously high. You still haven't answered the question if this is in Ireland so I'm starting to wonder. HONKEY TONK suggested that it was double pay if you claimed sick pay for the time off as well and that's correct.

Meeeee79

Kristopherus wrote: »

Minimum entitled is 20 working days. But I'm surprised the OP is being offered 30 days.

Minimum entitlement is 8% of hours worked so given that the OP is paid on an hourly rate then I would assume this 8% rule will apply to them, so not necessarily 20 days

nosilver

pilly wrote: »

No-one said that he was getting paid "in lieu" of holidays. He's getting his holidays, he just gets paid the extra 8% in his basic and doesn't get paid when he's off. It's perfectly legal although it's more common in jobs that are part-time or casual.

No, holiday pay cannot be included in a pay rate. Not even if its 8% above a rate.

You can check with WRC (formerly NERA) and get it confirmed.

You possibly could get away with detailing the holiday pay separately each week on a payslip, but I doubt even that would be permitted.

I come from this after having a nera inspection and askew specifically if it could be done and I was told it was illegal and that holiday details must be in writing in the employment contract and paid when requested by an employee when they are taking a holiday day.
He did allow that for part-time staff that they could have a rolling request for holiday pay each week, but that it had to be their choice and it had to be specifically detailed on their payslip.

In order to manage part-time holiday, we simply give an employment report every 3 months detailing hours worked, holiday earned @8%, holiday taken and end of quarter balance.

KpsCowley

The company is a multinational (mainly UK based), but has just (2017) opened an Irish sub company for operations within Ireland. The work is not yet permanent, so my contract is for a six month period, with the intention of extending it if we are busy enough. Yes the work is within the Republic of Ireland and I am paying typical Irish PAYE tax, and I am also Irish and a resident of Ireland.
The company uses the same approach to holiday pay for their zero hour (as required) contract employees in the UK, which has been ongoing for many years.

I have sent an email to the WRC, and look forward to their response.

the_pen_turner

How does this effect your tax. What if it puts you over a band.

Deise Vu

the_pen_turner wrote: »

How does this effect your tax. What if it puts you over a band.

It won't effect PAYE as you will get refunds after being on your holidays with no pay as pay and tax credits are cumulative.

It could put a lower paid employee onto a higher band of PRSI though, which is entirely dependent on what you get paid in a particular week. EG below €352 in a week = no PRSI; above €352 = 4% on the lot (crazy I know but Prsi is not paid by pre 1995 Civil Servants so the upper echelons don't give a monkeys how ****ed up the system is).

Hopefully OP comes back to let us know what the WRC says.

KpsCowley

Yes of course, I will let you guys know what the WRC say.

seamus

This is only enforceable if it's explicitly stated in your contract that your hourly rate is X, and that they will pay you X + 8% to cover your holidays entitlements.

If your contract says that your hourly rate is X + 8%, then they also need to pay you for holidays on top of that. You base rate cannot include your holiday pay.

Glenster

KpsCowley wrote: »

The company is a multinational (mainly UK based), but has just (2017) opened an Irish sub company for operations within Ireland. The work is not yet permanent, so my contract is for a six month period, with the intention of extending it if we are busy enough. Yes the work is within the Republic of Ireland and I am paying typical Irish PAYE tax, and I am also Irish and a resident of Ireland.
The company uses the same approach to holiday pay for their zero hour (as required) contract employees in the UK, which has been ongoing for many years.

I have sent an email to the WRC, and look forward to their response.

They can do whatever they want....

Meeeee79

Glenster wrote: »

They can do whatever they want....

Excellent piece of vague non helpful advice there.

How exactly can they do whatever they want??

rgace

KpsCowley wrote: »

The company is a multinational (mainly UK based), but has just (2017) opened an Irish sub company for operations within Ireland. The work is not yet permanent, so my contract is for a six month period, with the intention of extending it if we are busy enough. Yes the work is within the Republic of Ireland and I am paying typical Irish PAYE tax, and I am also Irish and a resident of Ireland.
The company uses the same approach to holiday pay for their zero hour (as required) contract employees in the UK, which has been ongoing for many years.

I have sent an email to the WRC, and look forward to their response.

I would seriously start looking for employment elsewhere if at all possible. You already stated you would get the same rate of pay exclusive of holiday pay elsewhere and this company sounds awful

Glenster

Meeeee79 wrote: »

Excellent piece of vague non helpful advice there.

How exactly can they do whatever they want??

it wasn't advice. all I was saying is that it's a temporary contract with a company based outside of Ireland.

as long as the wage is above minimum wage pro rated for the holidays (ie above minimum wagw) they can do whatever they want.

KpsCowley

Hi guys,

Thank you all for your help and advice in the previous responses.
Just to add closure to this thread. The response I got from the WRC was disappointing, they just copy/pasted their FAQ text in an email reply to me. So not clarification there.

I ended up deciding not to 'rock the boat' with my employer. The figures work out the same for the year, and getting the holiday pay per hour gives me the flexibility not to take holidays for increased pay. It is a PAYE position, but has all the markings of a self employed situation. 

Thanks again for all the replies.

The_Conductor

KpsCowley wrote: »

The figures work out the same for the year, and getting the holiday pay per hour gives me the flexibility not to take holidays for increased pay.

KPS- the company have to make all reasonable attempts to ensure you take at least the statutory minimum number of holiday days (exclusive of public holidays). Paying you to not take them- is not permissable.

r93kaey5p2izun

Substitute teachers received rolled up holiday pay up until around two years ago so it is definitely legal. It has implications if you become unemployed as to how long you have to wait for to be eligible for any payment. Bear that in mind.

Deise Vu

Kayson Witty Sister-in-law wrote: »

Substitute teachers received rolled up holiday pay up until around two years ago so it is definitely legal. It has implications if you become unemployed as to how long you have to wait for to be eligible for any payment. Bear that in mind.

If holiday pay has been included in your final pay check you are on holidays for that length of time and are not eligible for unemployment benefit. This is the same for every employee not just teachers and it can only happen on a short-term contract. It is compulsory for employers to ensure that full-time employees take their 20 days every year. (Yes that's twenty days, take a brief moment to shudder).

r93kaey5p2izun

Deise Vu wrote: »

If holiday pay has been included in your final pay check you are on holidays for that length of time and are not eligible for unemployment benefit. This is the same for every employee not just teachers and it can only happen on a short-term contract. It is compulsory for employers to ensure that full-time employees take their 20 days every year. (Yes that's twenty days, take a brief moment to shudder).

Yes I'm well aware it affects everyone and not just teachers - that's the point of my posting in this thread. The OP may not realise and if he works extra days as he has said he intends to then that will increase the days he will have to wait for any benefits. As I said he should bear it in mind.

And I have no need to shudder at your little dig, I spent years in private practice and self employed so I'm well aware of standard holiday entitlements. (If you'd like more holidays there's a teacher shortage right now - you have every opportunity.)

Best of luck OP.

GM228

Kayson Witty Sister-in-law wrote: »

Substitute teachers received rolled up holiday pay up until around two years ago so it is definitely legal. It has implications if you become unemployed as to how long you have to wait for to be eligible for any payment. Bear that in mind.

Rolled up holiday pay was declared unlawful in 2006 by the European Court of Justice (ECJ), it took until the 2016/2017 academic year for the Dept of Education to catch up fully with the judgement.

r93kaey5p2izun

GM228 wrote: »

Rolled up holiday pay was declared unlawful in 2006 by the European Court of Justice (ECJ), it took until the 2016/2017 academic year for the Dept of Education to catch up fully with the judgement.

Thanks for that info. Many had wondered why they changed it. Ten years to get their act together seems about right for them alright.

GM228

KpsCowley wrote: »

[font=arial, sans-serif]I have a new contact that states that my holiday pay is included into my hourly rate, and therefor I am not due any remuneration for days taken as holidays during the year. I think this is known as rolled-up holidays.
[/font][font=Calibri, sans-serif]
"As you receive a fully inclusive hourly rate (base rate and holiday pay) no further remuneration is due for holidays. "
[/font][font=arial, sans-serif]
Does anyone know if this is even legal in Ireland? Is being paid for holidays at the time taken a statutory entitlement?

Thanks.
[/font]

Back to the OP and the answer is no, it is not legal, did you ever follow this up?