As indicated in our last article on holiday pay accrual, the issue facing umbrella companies is to do with use of overarching contracts that continue employment in between assignments. However, the legal position for agencies that do not use overarching employment contracts is much more simple and involves the same rules that applied to furlough during the lockdown.
Some may recall the debate around whether agency workers accrued, or were entitled to, holiday pay in addition to furlough entitlement. Our position on the law from the outset was that they are not if they are engaged on a suitable contract for services. Although some others initially took a different view, this opinion was confirmed as reflected in government guidance (see here). Anyone with worker status is entitled to accrual of holiday and attributable pay if under an obligation to provide personal services in between assignments, but not otherwise.
Accordingly, agencies that engage their workers on contracts for services with no obligation to provide work in between assignments, so reflecting the normal real position, need not worry about accruing holiday pay in the break periods, and there should be no cause for confusion.
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