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Overtime becomes part of holiday pay

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Companies in the UK face a multibillion-dollar bill after a court said overtime should be part of holiday pay. This means the more overtime a worker does, the higher the holiday pay will be. A judge said it was wrong just to use basic working hours when working out holiday pay. Thousands of companies must now recalculate their holiday pay. Many workers can get money back from their employers from as long ago as 1998. The judge also said voluntary overtime and being on stand-by for emergencies should be included in holiday pay.

Over 15 per cent of UK workers do overtime. The UK government said the new law was unacceptable. It said: "We do not believe voluntary overtime should be included in holiday pay and are concerned about the potential impact on employers." Companies said the cost to businesses will be "unbearable" and could hurt Britain's economy. A labour union said: "This ruling not only secures justice for our members,…but means employers have got to get their house in order." It said it would fight for workers to "receive their full entitlement".