Holiday Pay for PAYE Agency Workers
In accordance with the Working Time Regulations 1998, where Morgan McKinley directly engages a worker for an assignment, the worker will be entitled to paid annual leave, also known as ‘holiday pay’. Please note, holiday pay is a taxable income and is therefore subject to statutory deductions such as Income Tax and NICs.
Workers will receive a statutory holiday entitlement of 5.6 weeks (28 days) inclusive of 8 bank holidays prorated across the year, this is equivalent to 12.07% per unit worked. For example if you are paid £100 per day the holiday pay would be £12.07 per day. Further information about holiday entitlement can be found on the Government Website.
Under the Agency Workers Regulations 2010 (AWR), upon completion of 12 calendar weeks within the same role and the same client, the worker is entitled to the same pay and working conditions as if they had been hired directly by the client. Therefore unless you are already receiving a rate that is AWR compliant you may see an increase in your holiday entitlement after 12 calendar weeks. For example, if a worker hired directly received a holiday entitlement of 33 days per year (inclusive of 8 bank holidays) the worker on an assignment with Morgan McKinley would see an increase to 33 days, this is called ‘contractual leave entitlement’.
Your holiday entitlement will be clearly stated within the Assignment Schedule on Gateway during your onboarding.
Morgan McKinley has 2 holiday pay schemes available to PAYE Agency Workers as further detailed below and you will be asked to confirm during your onboarding which scheme you would like to opt into;
Advance Holiday Pay
We will pay your holiday pay alongside each payment we make to you, this will be a week in arrears and therefore the first payment you receive will not include any holiday pay. You will not be entitled to any additional payments when you take holiday, because you will have had it in advance.
Your payslip will clearly show what element of your pay is holiday pay and basic pay.
You are still encouraged to take holiday and if at any stage you wish to change to the accrual scheme we can take action immediately. You are also required to make Morgan McKinley aware of any annual leave as outlined in the onboarding process.
Accrued Holiday Pay
We will accrue your holiday pay as you work with the balance then updated each week (in monetary value) on the payslip. Annual leave must be agreed with the Manager onsite and holiday pay requested with Morgan McKinley.
Please note any unused holidays accrued are paid out at the end of the assignment. Holiday balances are unable to be carried forward into a new calendar year and therefore if you are still on assignment towards the end of a year, any unused holidays will be released at the end of December (the exact date will be communicated to you closer to the time).
If during the course of your assignment you have any further questions about holiday pay our Contractor Experience Team will be on hand to assist you.