Guidance: SIA approved contractors and rolled-up holiday pay

Security Industry Authority

April 16
08:53 2024

Rolled-up holiday pay is when you include an amount for holiday pay in your hourly pay rates, instead of paying holiday pay when your employees take annual leave.

For leave years beginning on or after 1 April 2024, you must only offer rolled-up holiday pay to employees who fall within one of the following categories:

  • irregular hours workers people whose paid hours in each pay period are wholly or mostly variable under the terms of their contract
  • part-year workers people who are only required to work part of the year, and there is a gap of at least a week in which they do not work and are not paid

Read the Department of Trade and Industrys guidance for more information about this.

You will be breaking the law if you use rolled-up holiday pay for anyone who does not fall into these categories.

Your responsibility as an approved contractor

In most cases we expect workers to receive holiday pay when the holiday is taken.

You should identify any use of rolled-up holiday pay in your self-assessment. Your assessor will discuss this with you as part of their assessment planning.

If you use rolled-up holiday pay, you must demonstrate that you comply with the law and associated guidance. You must do this for your own employees and those of any sub-contractors you use. You must also do this for any operatives provided to you by a labour provider.

What your assessor will look for

Your assessor will check that you:

  • correctly determine the type of workers eligible for rolled-up holiday pay
  • effectively communicate your approach so that workers understand how this impacts them - this should include how you calculate holiday pay, and what it covers
  • separately identify the amount of holiday pay on payslips
  • regularly encourage workers to take holiday and use their full entitlement each year
  • reduce any barriers to taking holiday and do not discriminate or disadvantage workers

Your assessor will raise an improvement need if you do not meet our requirements. If this happens, you must do one of the following:

  • stop using rolled-up holiday pay
  • address any areas where you are not complying with the law

The assessor will conduct a re-visit to confirm what you have done.

Relevant evidence may include one or more of the following:

  • staff lists showing the number of workers receiving rolled-up holiday pay
  • payslips showing separation of holiday pay from working hours
  • details of the hours on which rolled-up holiday pay is based
  • audit records demonstrating that holiday entitlement and pay is operated correctly
  • a holiday policy and procedure explaining how you manage holiday entitlement and pay
  • communications to staff on how you manage holiday pay (for example, in a company handbook, letters of employment, induction materials)
  • feedback from staff to verify that they understand how their holiday entitlement is administered and that they receive the correct holiday pay
  • training records to show that individuals responsible for administering holiday pay have had appropriate training

A re-visit will include speaking to members of staff affected by your arrangements.

Published 16 April 2024

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