• Sat. Aug 13th, 2022

Freelancer and Contractor Services Association Amends Paid Time Off Compliance Code – Employee Benefits

ByDeborah C. Lowery

Jul 5, 2022

The Freelancer and Contractor Services Association (FCSA) has changed its compliance code, which would have prevented umbrella companies from retaining unused contractor paid leave.

As of July 1, the FCSA had planned to add a clause prohibiting member companies from keeping unused holiday pay for themselves.

Section A10(d) of its compliance code for apex companies was going to be updated to say: “Except for any deferred vacation entitlements…you must not retain accrued vacation pay beyond the end of the vacation year concerned.”

However, it has instead been amended to read:[You] confirm that you make reasonable efforts to ensure that employees receive their full annual leave each vacation year. »

According to the FCSA, under the Working Time Regulations 1998 (WTR), an employee can only be paid in lieu of their leave entitlement if they have accrued unpaid leave at the end of their employment. . It is not legal to pay an employee in lieu of their statutory holiday entitlement while their employment continues and, in rare cases, may result in the loss of holiday entitlement.

FCSA Chief Executive Chris Bryce said: “The reason for this is that the WTR is actually a piece of health and safety legislation; the purpose of authorizing an employee to take paid leave is to provide him with a period of rest and relaxation outside of work. If an employee receives a fixed allowance instead of taking his vacation, he renounces this period of rest and relaxation which could be detrimental to his health.

“The FCSA believes that the WTRs are outdated and should be amended to recognize modern working practices and allow umbrella companies to make payments in lieu of unused leave. The FCSA is lobbying the government to introduce these changes. Our advice to all employees is to make full use of their leave entitlements, to take the time off to which they are entitled to rest and recuperate.

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