Changes to how holiday pay is calculated in the hospitality industry

Following changes to legislation around the calculation of holiday pay for those working in the hospitality industry, we’re urging holiday park operators to ensure their businesses are legally compliant. 

The rules came about due to a tribunal case in which an employee successfully argued that tips administered via a tronc (a special arrangement for the payment of tips) but paid by the employer’s PAYE scheme were to be considered part of their basic pay, and therefore used in holiday pay calculations.

The legislation has been updated to clarify that basic pay alone should not be used to calculate holiday pay.
You can read more about the details of the case but we’re reminding businesses of the changes and urging them to check their existing arrangements, especially where the payment of tips is concerned.