Annual Leave Carryover

UK approved employee annual leave carryover from 2020 for 2 more years. Read more on annual leave carryover policies in the UK, especially after corona in March 2020. The statutory 18 months carryover rule was extended.
  • Author: Siva
  • Last updated: April 26, 2022
  • 5 Minutes
annual leave carryover explained by Papershift

With the holiday season fast approaching, many employees who have not used their full annual leave entitlement in the last calendar year may be looking for an extended break this summer. Others may be planning longer breaks next year when, hopefully, the turmoil of COVID 19 and other issues have settled down. This means employers face the challenge of tracking and managing annual leave carry-over as well as dealing with their employee’s annual leave requests.  

In this guide, we will look at the rules about holiday-carry over, how it can be handled in the workplace, as well as any legal issues that might arise. Let’s get started.  

What Is Annual Leave Carry Over?

Annual leave carryover (or holiday carry over as it is often informally referred to) is the idea that employees are allowed to carry forward the remaining days from their annual leave entitlement from one year to the next.

The Working Time Regulations gives workers the right to 5.6 weeks of annual leave in each leave year. This law specifies that 4 weeks of this entitlement must be taken in the leave year to which it relates, while the remaining 1.6 weeks can only be carried over by agreement with the employer for one leave year. There are a few exceptions to this, including where workers cannot take annual leave due to maternity leave or sickness. The ability to carry over leave is entirely at the discretion of the employer under the original Working Time guidance.

These rules have, however, been revised recently in light of the COVID 19 pandemic.

Why Has the COVID 19 Pandemic Affected Holiday Entitlement?

The COVID 19 pandemic has affected many areas of our homes and working lives. Not only have many employees been forced to work from home, but they may also have been prevented from taking holidays due to lockdown or travel restrictions. Because of this, the UK Government issued revised rules regarding how annual leave entitlement can be used giving workers more opportunities to carry over leave. This allows them to use it once the problems of the pandemic have lessened. This new legislature states that excess carryover may only be enacted where:

“In any leave year it was not reasonably practicable for a worker to take some or all of the leave to which the worker was entitled under this regulation as a result of the effects of coronavirus (including on the worker, the employer or the wider economy or society)”.

What Are the Revised Working Time Regulations?

Back in March 2020, the UK Government announced that existing Working Time Regulation regarding carrying over annual leave from one financial year to another will be relaxed. Workers who have not taken all their statutory annual leave entitlement due to COVID 19 have been given the opportunity to carry any remaining days over into the next 2 years.

The relaxation of the existing rules is intended to provide businesses affected by COVID-19 with the flexibility to better manage their workforce, while protecting employees’ rights to paid holiday. This temporary increase is aimed at helping to alleviate the pressure on employers trying to juggle an abundance of left over leave as a result of social-distancing, lockdowns, business closures and travel restrictions.

The law applies to anybody who is unable to take leave because of COVID-19. This includes those who have been forced to self-isolate, leaving them unable to take paid holiday before the end of the year. It also covers those who couldn’t take leave because they had to continue working due to the sector they were employed in. This includes those in the medical profession and other emergency services.

I’m On a Zero-Hour Contract, Do the Changes to The Working Time Regulations Apply to Me?

The changes to the Working Time Directive apply to almost all workers, including agency workers, those who work irregular hours, and workers on zero-hours contracts. This means the ability to carry over leave applies to nearly all employees. The main exception is those who are genuinely self-employed and Directors of companies.

So, Under Normal Circumstances I Can’t Carry Over Leave?

In short, yes… unless your employer allows you to carry it over. Under the Working Time Regulations 1998, the general rule is that statutory leave may only be taken in the leave year to which it relates. If it isn’t, it is lost. This is sometimes referred to as the “use it or lose it” rule. 

There is nothing to prevent an employer from allowing a worker to carry over unused annual leave if the worker cannot take it in the relevant leave year. However, the employer cannot compel a worker to carry over statutory holiday and they can refuse an employees request to do so.

There are, however, a few exceptions where annual leave carry over may be legally entitled.

Exceptions For Statutory Annual Leave Carry Over

There are some circumstances in which the law has established that employees should always be permitted to carry over unused statutory holiday to the next leave year or beyond. These include:

  1. Where a worker has been unable to take their holiday entitlement because of maternity leave. 
  2. Where a worker has been unable to take their holiday because of taking sick leave. Employers are legally allowed to limit carry over in the case of those on long-term sick leave. Generally, any holiday not used up within 18 months of the end of the leave year in which it accrued is lost.
  3. Where a worker did not have an effective opportunity to take their holiday entitlement. This may be due to pressures of work. 

As an Employer, Are There any Tech Solutions That Can Help with Managing Annual Leave?

Yes, there are. There are many software solutions for managing employee leave, many of which replace the tasks of an HR teams. Often, these comprehensive solutions can work out the holiday allowance and pay for workers automatically as well as allowing staff to book holidays and track their own allowance. 

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In Conclusion

Annual leave carryover is a complicated subject. But with the help of our guide, we hope you find the subject easier to understand.

For more comprehensive workplace help, check out the rest of our website.

Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)