Paying employees for their annual leave in the UK used to be viewed as a straightforward process, with many companies calculating holiday pay at the employee’s basic pay rate.
However, in 2014, several employment law cases raised the issue of whether, during annual leave, employees should also receive an amount in respect of overtime and commission. One case indicated that even non-guaranteed overtime needed to be included in holiday pay if the overtime and commission were part of “normal remuneration”. In essence, if an employee regularly undertook overtime work, then they should expect to receive the same level of remuneration while away on holiday.