Zero-hours contract holiday pay calculations made easy with Work & Accrue

We’re pleased to announce that we have introduced a new formula Vanquish to support organisations accurately calculate zero-hours contract holiday pay calculations.

The new Work & Accrue holiday function automates the complex calculation process to help organisations enforce regulatory compliance and maintain an accurate payroll process.

Holiday pay admin burden

Zero-hours contracts are popular in industries such as Hospitality, Contract Cleaning and Manufacturing – providing employers with the flexibility to scale up or down their staff resource to meet demand.

But whilst zero-hours contracts may be seen as a cost-effective staffing solution, the irregularity of the employment adds to the administration burden facing HR and Payroll Teams.

This is because zero-hours contract entitlements, normally set out in an employment contract for full-time workers, are instead based on the number of hours actually worked, resulting in more complicated and time consuming calculations.

Vanquish screenshot

Zero-hours contract holiday pay calculations

Zero-hours contract holiday pay is calculated at 7.24 minutes for every full hour worked based on the statutory entitlement of 5.6 weeks or 28 days a year.

The Work & Accrue feature developed for Vanquish automates this formula and operates in real-time so administration staff can see at a glance the amount of holiday days accumulated as the hours are recorded. Self-service functions allow employees to better manage their own time too.

Meanwhile, with full transparency of employee attendance data to hand organisations are better placed to average out the worker’s pay rate over the last 12 weeks, as per guidance where employees are not on a fixed pay rate (for example doing different types of work at different rates).

Improvements in payroll accuracy are achieved by using biometric data capture ‘clocking’ terminals to collate accurate data, whilst direct integration with payroll software means organisations can streamline the entire process and remove human errors.

Christian Berenger, Operations Director at Vanquish Integrated People Solutions, says: “The introduction of the new Work & Accrue holiday function demonstrates how we listen to our customers and develop solutions to make their lives easier.

“The feedback we received from employers is that whilst they like the flexibility of zero-hours workers, they create a real administrative headache in particular when working out zero-hours contract holiday pay. For employers still relying on manual timesheets it is almost impossible and can mean spending hours trawling through paper work to make a calculation which should take seconds.

“The Work & Accrue feature removes the laborious process in its entirety so organisations can gain peace of mind that they are paying workers correctly and giving them the holiday rights they deserve whilst reducing valuable admin time.”