Workers are legally entitled to different types of leave, some by default and others depending on specific circumstances that may arise. Other types of leave are supplementary benefits that are offered by specific employers.
It’s important that employers make themselves aware of all of their workforce’s statutory entitlements as well as leave types that are left to their discretion. This guide walks you through the main reasons for leave of absence, relevant allowances, and eligibility.
Leave of absence & payroll
Your HR and payroll software plays a key role when it comes to absence management. Employers need to keep track of whenever their employees take leave, the type of leave, and any accrued holiday, in order to pay employees correctly.
The impact of Leaves on your payroll is manifold:
- When an employee leaves, the employer is obliged to pay out any leftover days as accrued holiday pay
- When employees go on statutory leave, employers are entitled to deduct statutory pay from their HMRC bill
- Unpaid leave must be deducted from pay
The payroll software market in the UK has a few new entrants like Zelt in recent years which unify HR and payroll. Such new tools help employers collect the right information regarding Leave Types at the time an employee requests time off in their employee portal, and automatically translates the impact of Leaves into your payroll so that employees receive the right amount of Pay.
Using modern software helps reduce administrative time required to manage leaves, reduces human error, decreases friction with employees in the approval of time off, and makes sure you don’t forget to claim back Statutory Pay from HMC.
We recommend you pick the right payroll software for your business to manage this process seamlessly.
Statutory Annual Leave
Almost all workers (including agency workers, workers with irregular hours or zero-hour contracts) have a legally protected entitlement to 5.6 weeks (28 days) of paid holiday per year. This is what is known as ‘statutory leave entitlement’ or ‘annual leave’.
Part-time workers have the same entitlement (5.6 weeks), however, this will add up to fewer than twenty eight days of holiday. People that have irregular working hours can take paid time off for every hour that they’ve worked. They can estimate their entitlement by using the government’s calculator based on their average weekly days or hours worked.
Employers can choose whether or not they include bank holidays as part of their employees’ statutory annual leave. In addition, employers can give their employees more than the legal minimum; adding this to the company’s compensation package can help improve the employee experience.
How to calculate holiday entitlement
Workers have the right to get paid for leave, build up holiday entitlement during maternity, paternity, adoption, and sick leave, as well as request holiday at the same time as sick leave.
Workers are entitled to their normal weekly pay for every week of statutory leave taken, though this can get a bit more complicated for shift and casual workers so it is worth using a holiday pay calculator to work out how much someone is entitled to.
Pro-rating holiday entitlement
Pro-rata holiday is an amount of holiday that’s in proportion to the holiday entitlement of a full-time employee. The proportion depends how much an employee works relative to a full time employee.
Calculating pro-rata holiday entitlement for part-time employees is straightforward.
- Work out what proportion of a full-time working week they work
- Multiply this by the amount of holiday a full-time employee is entitled to.
If an employee works days of varying lengths, holiday entitlement should be calculated in hours, otherwise an employee might take all their holiday in days when, in reality, they work longer hours.
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Statutory Sick Leave
Employees are allowed to take time off work if they’re sick. If they’re ill for more than seven days, they’re required to show evidence that they’re actually sick to their employer.
Employers only need to pay employees on sick leave SSP if they pay Class 1 NICs for that employee and they are sick for more than 4 consecutive days.
Workers that are classified as employees, earn at least an average of £123 a week and have received eight weeks worth of pay are eligible to receive Statutory Sick Pay.
Statutory Sick Pay (SSP) amounts to £99.35 a week for a maximum of 28 weeks from the fourth day that an employee is off sick. SSP is paid in the same periods as standard wages and NI and Tax are deducted.
Statutory Maternity Leave and other Leave types related to parenthood
There are a number of different Statutory Leave entitlements for employees in the UK that are related to becoming or expecting to receive a child, namely Maternity Leave, Paternity Leave, Parental Leave and Shared Parental Leave.
Eligible employees are entitled to up to 52 weeks of maternity leave. Maternity leave is split into ‘Ordinary Maternity Leave’ (the first 26 weeks) and ‘Additional Maternity Leave’ (the latter 26 weeks).
Expecting mothers can take leave up to 11 weeks before their due date and need to take a minimum of 2 weeks following the birth.
Eligible employees can expect to be paid for 39 weeks of their maternity leave. For the first six weeks, they will receive 90% of their average weekly earnings before tax, and for the rest of the time either £156.66 per week or 90% of their average weekly earnings (whichever figure is lower).
Fathers also have the right for Statutory Leave, similar to mothers. More information on this topic can be found in this related blog article.
Unpaid Parental Leave
Eligible employees are able to take unpaid parental leave to look after their children. This can be simply because they want to spend more time with them, look at new prospective schools for them, or help settle them into a new childcare arrangement.
Employment rights are protected during parental leave. Eligible employees are entitled to 18 weeks total leave for each of their children (up until their 18th birthday), however they can only take 4 weeks maximum per year per child. Parental leave is not tied to an individual’s specific job, but can be carried over job to job.
Time off for family and dependents
Employees have the right to take time off, when necessary, if they need to handle an emergency that involves a dependent of theirs. There is no set allowance or limit. Instead, this kind of leave is dependent on the situation at hand and the employee should be given a reasonable amount of time to deal with the emergency.
There are no limits or allowances on the number of times that an employee can take time off for dependants. However, it is up to the employer to decide whether they pay their employees for this time off or not.
As an alternative, employers may give their employees what is known as ‘compassionate leave’. This can also be paid or unpaid depending on the employer.
Extended Leave / Career Break
There is no legal provision for work allowing you to take an extended leave of absence from work, so it is at the employer’s discretion whether or not to offer it to their workers. Workers may want to take a career break to make time for travelling, pursuing further education, or simply taking a step back from work.
If an employer chooses to offer extended leave to their employees (which can also have an impact on the employee experience), it is essential to clearly outline their policy, either in their employment contract or employee handbook, explaining:
- The eligibility and notice periods
- How to apply for extended leave and the maximum duration
- Whether or not the employment’s contract terms and conditions continue
Note that employees cannot take legal action against their employer if they decide that they cannot return to their job or a similar position after a period of extended leave.
Zelt is a next generation employee management software which is centered around the needs of employees, not business administrators. Our unified workplace platform lets you manage your workforce efficiently across HR and IT in one central hub. All processes and applications are integrated into the centralized platform, accessible from any location and device.