Hi everyone
At the beginning of the year we introduced a holiday buy and sell scheme. I have just been asked a question about how it works and we have got ourselves in a bit of a pickle so I am hoping that someone can clarify how these schemes work.
Basically, one of our drivers bought 5 days extra holiday at the beginning of the year. This is deducted from his weekly pay. He is now saying that he has paid for the extra days in his weekly pay and therefore should get his basic wage when he takes the bought days.
Our Wages department are arguing that he has paid for the priviledge of receiving an additional 5 days and by us paying him for them, he is not actually losing anything and is in fact gaining 5 days holiday free of charge.
I am sure this is quite simple but with 3 of us all appearing to have differing opinions I would appreciate it if someone could spare the time to explain, in simple terms, how this should actually work.
Many thanks in advance.
Rachl
Replies
Hi Rachel,
We use this scheme where I work and I think I can explain in a way that will make sense to your employee. If an individual for example buys 5 days holiday, we would calculate how much that individual would be paid for 5 days. For example this could be £500. We would then divide that figure by 52 (number of weeks in a year) £500 divide 52 = £9.61.
Therefore each week the employee will pay £9.61 for the extra weeks holiday as this is beyond what they are entitled to and is a privilege they will need to pay for it.
When pay day comes they will receive their weekly pay as normal as they have been paying for the holiday each week of the year so they will still receive pay for the days that they take off work. So for example if an individual takes the week of 22nd August off, and this was their extra week, we will still pay them for that week as we would if they were working, he has already paid for the holidays each week so if we didn't pay him on the actual week then he would have paid for the holidays twice.
I hope this helps!!!
Thanks,
Jen
Hi Rachel
Crikey I had to read this one a few times.
Your employee is correct he has 'bought' the additional holiday, therefore when he takes the 5 days he should receive salary as he would ordinarily.
Not sure I get your wages department logic he is not buying the privilege but the actual days holiday, otherwise we are underpaying him each week!!
All the best
Sarah
Hi there,
I imagine that you are possibly all getting confused because you are deducting this weekly from him.
In our company we introduced a holiday purchase scheme a couple of years ago and it has grown in popularity. We give employees the chance to buy holidays only twice a year to keep continual admin time down, we then take the days from the months salary of which they have bought them but limit this to 3 days per the holiday year and they cannot be sold back, it is then easier to manage with wages, especially if they leave.
Has he paid for all the 5 days holiday yet now from his weekly allowance? If so then there should be no further deductions when he takes these 5 days. He is not gaining 5 free days as he will have paid for them over whatever period of time you have taken his deductions, well hopefully anyway. These would then be treated like any other holiday he takes from his allowance so he should continue to be paid as normal and no further reductions.
Just something else to check, you mention that you offer a 'sell scheme' as well, is this because you offer over and above statutory holiday allowance or purely if they have bought them and then not taken then? I am sure you know but if you only offer statutory then you should not be allowing anyone to sell them back as a general rule, unless in extenuating circumstances such as maternity leave or long term sickness.
Your employee, the driver is correct in what he is saying and I think the wages dept are just getting a little confused as some do when these things are introduced. He has bought these now so he receives his normal pay when he takes them.
I hope that makes sense but if not then please don't hesitate to post again.
Clare