Hundreds of thousands of UK workers could be missing out on holiday pay they are legally entitled to receive, as the Government’s new Fair Work Agency prepares to crack down on employers who fail to pay staff correctly.
The agency estimates that around 900,000 workers lose approximately £2.1 billion in unpaid holiday pay every year, making holiday pay one of the most common areas where workers are underpaid.
Fair Work Agency prepares crackdown on unpaid wages
The Fair Work Agency, created under the Employment Rights Act, has made recovering unpaid wages and enforcing employment rights one of its top priorities. It has been given stronger powers to investigate employers, recover unpaid holiday pay, enforce National Minimum Wage legislation and take action against businesses that repeatedly breach employment law.
Why this matters to workers
Many employees assume their holiday pay is calculated correctly, but mistakes are more common than many people realise.
Workers may have been underpaid if employers have failed to include regular overtime, commission payments or other payments that should form part of their holiday pay calculations.
The issue can affect full-time, part-time, agency, temporary and zero-hours workers, particularly those whose earnings vary from week to week.
With stronger enforcement now available, workers who have unknowingly lost money may have a better opportunity to recover what they are owed.
Fair Work Agency targets rogue employers
Its responsibilities include:
- Recovering unpaid holiday pay.
- Enforcing National Minimum Wage legislation.
- Tackling labour exploitation.
- Investigating employers who repeatedly breach employment law.
- Improving compliance with workplace rights.
The agency is expected to focus particular attention on sectors where employment abuses have historically been more common, including hospitality, construction, agriculture, adult social care, recruitment, hand car washes and nail salons.
Workers should check their payslips
The Workers Union is encouraging employees to review their holiday pay carefully.
Workers should consider whether:
- Holiday pay reflects their normal earnings.
- Regular overtime has been included where appropriate.
- Commission or regular allowances have been taken into account.
- Annual leave has been paid correctly.
- Payslips accurately record holiday payments.
Anyone who believes they have been underpaid should raise the issue with their employer and keep copies of payslips, contracts and holiday records.
The Workers Union view…
Every worker deserves to receive every penny they have legally earned.
The creation of the Fair Work Agency represents one of the most significant improvements to workplace rights enforcement in recent years. Stronger enforcement should help ensure employers who deliberately underpay staff are held accountable while encouraging businesses to review their payroll systems and correct genuine errors before workers lose out.
For many employees, checking a payslip could be worth far more than they realise.
