It has always been my understanding and is stated clearly on gov.uk that 'The only time someone can get paid in place of taking statutory leave (known as ‘payment in lieu’) is when they leave their job'. We have had several employers ask us to include an addition on the payroll for a payment in lieu of holiday as the end of the holiday year nears. We are directing the clients to Gov.uk and the guidance above and advise that they should take HR Advice as we are not HR Advisors.
One client has come back and said that their HR Advisors have told them that they can make the payment in lieu of holiday as they 'are a small company' and so it would 'not be practical for them to be able to cover the holidays'. This seems completely wrong to me, and the fact that they would be unable to cover the employee should they take leave is purely a staffing issue. I thought that this is the reason why HMRC has extended the holiday leave to be taken over the next 2 holiday years, so employees do not all request to go on leave en masse.
This employer only offers the statutory minimum holiday entitlement and does not provide anything above this.
Have I missed something here? Is my understanding wrong or is the HR Advice my client has received wrong?
Another client has come back and said that we are wrong as the employees are on Zero-hour contracts - I am not sure how this fact changes the situation in terms of paying out accrued holiday.
If the client is wrong and it should not be paid, would you continue to add it to the payroll on the basis that they have received the advice independently, and as mentioned, we are not HR Advisors?
It is my opinion that I will include the addition irrespective of my thoughts as the client has sought the HR Advice and so any liability falls on the employer and their HR Advisor.
Thank you in advance!