Small Business unprepared for holiday allowance increase

Small Business unprepared for holiday allowance increase


Small Business unprepared for holiday allowance increaseTwo-thirds of small firms are unaware that the statutory minimum holiday allowance for employees will increase to 28 days from the 1st of April.

At present, full-time employees are entitled to at least 24 days holiday per year including bank holidays. From April 1st, this will increase to 28 days including bank holidays. The law was brought in to stop employers including the eight bank holidays in the standard 20-day entitlement.

Research revealed that 55% of small business owners believe the increase will have a detrimental effect on their business.

According to the Department for Business, Enterprise and Regulatory Reform (BERR), employers were made aware of the changes in July 2007 when the phased holiday allowance increase was announced, and many have already introduced the full increase.

“We deliberately adopted a phased approach to minimise the impact on employers, including splitting the rise over several years rather than increasing by eight days in one go,” said a BERR spokesman. “Many employers have introduced the full 28 days annual leave for their workers already.”

Chartered Institute of Personnel and Development adviser Angela Baron said that it was worrying that small firms were unaware of the changes as it is a legal requirement.

“Ignorance is not an excuse when it comes to employment legislation – if somebody takes them to tribunal for not giving them the full holiday allowance they will not be let off just because they didn’t know,” she said.

“In the short-term it might present a few operational issues, such as having to manage cover for people,” added Baron. “However, it’s more likely that people will be productive while they are at work and they are less likely to take time off sick at short notice, so the benefits of offering more holiday will outweigh the downside.”

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