How does a leap year affect my staff?
As we all know, 2020 is a leap year, meaning it has one extra day (the Leap Day). What we’re not all so sure about is whether this means UK workers will be entitled to an extra day’s pay.
From a legal point of view, an extra day’s work doesn’t necessarily mean more money. It all comes down to how a worker is paid.
Generally, a salaried worker won’t be entitled to extra pay despite potentially working an extra day in a Leap Year because their salary is fixed against a year and not a specific number of days per year.
That said, if a salaried worker is earning close to the National Minimum Wage (NMW)* an employer should check that an additional day of work does not send them below the NMW when their earnings are averaged against days worked.
Employers should check that any low paid workers’ salaries are high enough to account for an additional day of work so as to avoid facing big fines for breach of the NMW Regulations.
Hourly Paid Staff
Employees paid on an hourly basis for the hours they actually work should of course receive an extra day’s pay if they work the Leap Day (Saturday, 29 February 2020).
Equally, if they don’t work the extra day, they’ll have no entitlement to extra pay.
If you’re concerned about how the Leap Day might affect your workers’ earnings, seek advice from your Payroll Department or your Accountant to ensure you are complying with the NMW Regulations when calculating staff earnings for 2020.
*Please visit https://www.gov.uk/national-minimum-wage-rates for NMW rates