Extra holidays - impact on business

The introduction of eight additional days’ holiday entitlement could have serious consequences for some businesses.

That is the warning from the Forum of Private Business (FPB), which is concerned that firms that do not currently give their employees 28 days’ paid leave every year will have to take cost-cutting measures to cope with the changes.

The government has published new regulations to boost the minimum holiday entitlement from 20 days a year to 24 days from October 2008, and to 28 days from April 2009. All part-time workers will be entitled to the extra holidays pro rata.

The FPB’s Research Manager, Rebecca Leavers, said business owners will not just be hit by the cost of finding cover for employees on leave. ‘Although it is true that there will be a substantial cost for some firms in terms of reduced productivity or finding extra cover for workers on leave, the impact on smaller businesses doesn’t end there,’ she said. ‘There is also the administration of such a change – contracts will have to be rewritten, for example.’

The Government claims businesses would benefit from reduced absenteeism and a more motivated workforce – but Ms Leavers is reserving judgement.

‘Many employers, who have a good relationship with their staff and actively promote flexible working, and the health and safety of employees in the workplace, still suffer from absenteeism,’ she says.

SG comment - what the above article does not reveal is that the proposed 24 and 28 days would include bank holidays, so I don't think this has major shakes. Not sure about other sectors, but all tax professionals I see have a minimum of 20 days holidays plus bank holidays, so the above proposals won't really change anything.