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Holiday Back-Pay Deduction Claims Limited
Until recently, there was no limit on how far back in time an employee could go in seeking to reclaim unlawful deductions from wages made by their employer (as long as they formed part of the same series of deductions or payments).

Since the beginning of this month new regulations mean that an employment tribunal can only look back two years from the date of the complaint when considering alleged unlawful deductions. This includes any fees, bonus, commission, holiday or other payments in relation to an individual’s employment.

The purpose of this new legislation is to limit the impact on businesses when it was decided that non-guaranteed overtime could form part of a worker’s holiday pay. Employers had been concerned that workers might make claims for retrospective under-paid holiday stretching back to 1998 when the Working Time Regulations came into force.

However, employers still need to be alert to the fact that the new time limit does not impact on claims for deductions of certain types of remuneration e.g. statutory sick pay, statutory maternity pay (and other similar statutory family leave payments) and guarantee payments.
Posted on 19 Nov 2016

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