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Holiday pay formula added to time and attendance system

Published 23rd January, 2015 by Neil Nixon

Holiday pay formula added to time and attendance system

Auto Time Solutions has increased the capability of its time and attendance solution to support organisations with their compliance to the new holiday pay ruling. A landmark employment tribunal recently ruled that employers should take into account any compulsory overtime as part of holiday pay calculations. Currently holiday pay is based on an individual's basic pay and doesn't include overtime.

To support employers with their compliance to the new ruling, Auto Time has reacted quickly to the impending change by introducing a new formula to its solution. Christian Berenger, business development director at Auto Time, said: “We have reacted quickly to reassure employers that we can support them through this impending change. The new formula allows employers to start including overtime as part of holiday pay calculations and utilise employee attendance data to calculate the exact cost of any past and future claims owed to claimants based on their actual earnings. Even if the data isn't available, the system has the capability to calculate the average amount of overtime worked across the entire organisation and calculate a figure to within pounds and pence.”

Although the decision is expected to go to appeal, the potential impact of the new ruling is forcing many employers to review how they monitor the workforce and calculate holiday pay with immediate effect. Christian Berenger understands the administrative and financial concerns that organisations may have about the new ruling. He added: “The new overtime ruling has caused shockwaves in boardrooms across the UK as many are simply ill-prepared and don't have the tools in place to understand the potential cost to their business. Today, time and attendance systems don't just unearth time and cost savings during the payroll process but can play a central role in critical situations like this, where accurate data is required to demonstrate compliance to workplace regulations. The creation of a fully auditable trail of individual attendance data can help alleviate the administrative burden in the event of a claim, enabling calculations to be based on historical evidence. Without accurate attendance data employers run the risk of leaving themselves open to an administration headache and being caught out in the future.”

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