Holiday entitlement and the Working Time Directive

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'Inclusive' rates: how some employers meet the holiday requirement

Initially, keeping a contract to under thirteen weeks was an effective way of avoiding the need to pay holiday entitlement. Since the law changed in 2001, however, that has no longer been an option, and some employers have adopted other ways of satisfying the letter of the law.

The most common practice, adopted as standard procedure by many production companies, is to give a freelancer the paid holiday he or she is entitled to, but to reduce the freelancer's weekly rate accordingly; so that over the course of the contract, the company uses the money it saves from paying the freelancer a lower rate, to meet the cost of paid holiday time. Some interpret this as making the freelancer meet the cost of their holiday out of their own rate. In effect, it means the freelancer takes a cut in pay.

In this way, the employer can truthfully state that the freelancer is being offered paid holiday time; and if the holiday is not taken, any accrued holiday pay is given to the freelancer at the end of the contract, as required by the Regulations. All this does, of course, is make the freelancer's fee back up to (what he considers to be) his normal full rate.


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