Did you know 2024 is a leap year which means there are 366 days in the year rather than the standard 365 days. This occurrence happens every four years, and means we have an extra day in the calendar, the additional day falls on 29th February.
So, what exactly does that mean to your Employees and their pay?
In our article we cover exactly what as an Employer you should be doing about Employee/s pay, depending of course whether they are paid an hourly rate, salaried and we delve into the variables.
How should you manage leap year pay?
Why not take a read:
Ultimately, your Employee/s pay entitlements on the 29 February 2024 will be dependent on whether you pay them an hourly rate or if they are salaried, you should have provisions in place to manage this, your payroll is the best place to start.
You should also consider the terms and conditions of Employee/s individual contracts of employment, in particular for salaried Employee/s you should ensure that unless it explicitly states additional pay is made to them on the extra leap year day, then, they are not entitled to receive payment.
What if your Employee/s are on an hourly rate?
Where you have Employee/s on an hourly rate they are entitled to be paid for all of the time they work. In a nutshell, if your Employee/s works an extra day, then, you will be liable to pay them for the extra time. Remembering, if the 29th falls on a normal working day anyway, you must pay them as usual.
See our example, if your Employee/s is on an hourly wage and they work the extra day (due to the leap year), then they are entitled to receive payment for the hours worked.
However, it is not as simple as that…Let’s take a look in more detail.
You do need to be aware, and it all depends on your pay structure, so, if an Employee/s is paid hourly with a pay reference of one week, that means they are paid weekly, and there will be no difference to their pay. That is because a leap day does not mean a seven-day week becomes an eight-day week.
Similarly, you need to consider hourly paid Employee/s with a pay reference period of one month, meaning they are paid monthly, they will see an increase because the number of days worked in the pay reference period has changed. To keep it simple, they will have worked for 21 days in February rather than the usual 20 days.
What about Employee/s who are salaried?
It is true that for ‘salaried’ Employees, that means those who receive the same basic pay every month are not entitled to any extra pay; and yes, this is despite them working the additional day, this is due to them being paid a set salary for the whole year, and the extra ‘leap year’ day will have already been factored into their overall earnings.
You should ensure that you check the terms and conditions of Employee/s individual contracts of employment, you should ensure that unless it explicitly states additional pay is made to them on the extra leap year day, then, you are not liable for payment.
And there’s more:
For Employee/s earning the National Minimum Wage (NMW), you need to check the additional day does not reduce their pay to below the statutory minimum, failure to pay the NMW, can result in criminal conviction and/or financial penalties.
How can we help you?
We can help you with your payment query, we are a team of highly experienced HR Consultants who can manage and assist you in any capacity, we have the relevant skills and knowledge to support you, we can work with you on a retained basis or for any length of time, why not contact us for a confidential no obligation chat. 0333 006 9489 or email us at [email protected]
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