The government has recently taken action to minimise the
potentially damaging impact of the latest ruling that holiday pay should
reflect non-guaranteed overtime, by introducing new legislation.
The Deduction from
Wages (Limitation) Regulations 2014 was laid before Parliament on 18
December 2014. This:
The aim of this legislation is to reduce the potential costs
to employers and provide clearer guidelines to employees over their holiday pay
Limits all unlawful deductions from wages claims
to two years before the date of claim (with the exception of certain categories
of claims such as statutory sick pay, statutory maternity leave and guarantee
payments, which will not be affected); and
- States that the right to paid holiday is not incorporated as a term in
It is worth noting, however, that the new Regulations do not
come into force until 1 July 2015, and therefore only apply to claims made on
or after this date. This means that employers should be aware of the
possibility that employees may still make claims under the existing arrangements
until next summer.
For more information on the impact of the recent holiday pay
ruling, ACAS provide useful guidance which can be accessed here.