UK health club operators may leave themselves vulnerable to potential employment tribunals if they fail to grasp the changing rules on how to calculate holiday pay for their staff.

That’s according to employment law expert Jessica Higgins, who says recent interpretations of the Working Time Regulations and the Working Time Directive mean that regular overtime and commission must now be factored in when calculating gym workers’ holiday pay.

In other words, when calculating holiday pay, a business has to factor in not just an employee’s basic salary, but also the commission they would normally earn and any extra income they would expect to get – a bonus, for example, or from working compulsory overtime.

According to Higgins, the position in respect of voluntary overtime is less clear, but current advice is that – if fitness staff regularly work such overtime as part of their normal duties, as many in the industry do – it should be included as part of their holiday pay. Bonuses and other regular payments should also be included.

“If you fail to pay correct holiday pay, your staff will be able to bring a claim in the Tribunal for an unlawful deduction of wages,” said Higgins in an article for the latest edition of Health Club Management.

“This must be done within three months of the date of the failure to make payment. Claims are limited to a two-year period over which the deductions were regularly made, meaning there must have been no more than a three-month gap between the deductions.”

To read the full article from Higgins, which reveals how to correctly calculate holiday pay and also covers how it is affected by sick leave and shift-switching, click here.