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Final wages and holiday pay when you cease employment

November 24, 2019

 

Employees who are leaving their employment for any reason (Eg by resignation, retirement, redundancy, dismissal or completion of fixed term) usually get their final wages and holiday pay on their last day of work, but may be paid it in their pay for the final period of their employment.

 

If you're an employee and think your final pay is overdue, you should speak to your employer in the first instance.

 

Public Holidays

There is a rule that means employees are sometimes entitled to be paid for public holidays that fall after their employment has ended (ie after their termination date). This can happen if the employee has unused holidays they are entitled to at the time their employment ends. This rule doesn't apply to employees who haven't completed 12 months service because they haven't become entitled to annual holidays yet.

 

To work out whether an employee is entitled to paid public holidays that happen after their employment ends, follow these steps.

 

  1. Treat any remaining annual holidays that the employee is entitled to as if the employee had taken them immediately after the date their employment ended.
     

  2. The employee must be paid for a public holiday if it:

  • happens within the time period created by adding on these remaining annual holidays to the end of employment, and

  • happens on a day that the employee would have worked if they were still employed, and the day wasn't a public holiday.
     

3. If the employee is entitled to be paid for a public holiday then:

  • the period that the annual holidays covers is extended by one day for each public holiday the employee is entitled to be paid for, and

  • this new extended period may contain more public holidays which also need to be considered for payment.


The payment for any public holidays is calculated in the usual way. They are paid at the rate of relevant daily pay or average daily pay (if applicable) for the day.

 

Note that this situation as no effect on the actual end date of employment.

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