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Temp workers risk missing out on £97 million in holiday pay

Temporary workers across the UK are at risk of missing out on up to £97 million in unclaimed holiday pay over the Christmas period, according to independent worker support group IWORK.

Many temp workers are unaware they're entitled to holiday pay, and so IWORK estimates that if just 2% of the temporary workforce miss out on their £3,000 annual entitlement (based on an average annual salary of £26,000) then £97 million is being unclaimed from employment agencies and umbrella companies.

Calculations are based on data from the Office for National Statistics (ONS) which show there are currently 1.6 million temp employees working in the UK. 

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Matt Jenkin, employment specialist at law firm Moorcrofts, explained how temp workers can go about claiming holiday pay.

Speaking to HR magazine, he said: “For temps looking to claim holiday pay, the starting point would be to request to take accrued holiday during the period of the temporary contract.

"In that way, they would be entitled to be paid normal remuneration during the holiday period. However, and taking the Christmas period as an example, it is likely that temps will expect not to take holiday at this time and even if they request it, employers might legitimately turn down the request as they need the temp to work the busy Christmas period. 

"In those circumstances, once the temporary contract has come to an end, the temp should be paid in lieu of any accrued but untaken holiday in addition to wages for working during this time."

Research from flexible working marketplace Indeed Flex released in June 2022 showed 9.8 million people were working in part-time or temporary jobs - the highest number recorded since the start of the pandemic.

Julia Kermode, founder of IWORK, highlighted the importance of temp workers to the economy.

She said: "£97million  is a staggering figure, but in reality, it’s very likely just the tip of the iceberg. With the cost of living crisis taking hold and people spiralling into debt, it’s vital that temporary workers claim what’s rightfully theirs – especially when taking some time off this Christmas, which is by far the most expensive time of the year. 

"Temporary workers are incredibly valuable to the economy. They’re an unseen army of unsung heroes who prop up businesses in their times of need. But they’re at risk of being exploited.

"Of course, this practice isn’t representative of all umbrellas and recruitment agencies. So, along with encouraging temps to claim paid holiday, we are stressing the importance of compliant umbrella companies and agencies ensuring these workers receive what’s owed to them."

Jenkin added: "One additional point to note at this time of the year is that many employers have a holiday year that is the calendar year.  Given that the usual rule is that accrued holiday can’t be carried over into the next holiday year i.e. use it or lose it, temps whose work straddles the end of one holiday year and the start of another, could see untaken holiday from the current holiday year being lost. 

"Temps in that position should look to agree with the employer what will happen to any accrued but untaken holiday  at the end of the holiday year. This could be taken before the end of the leave year or with the agreement of the employer, carried over into the next holiday year."