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Do you have to pay your employees when they take annual leave?

by , 14 January 2014
One of the most frequently asked questions regarding annual leave is whether or not employers must pay their employees when they take it. Read on to find out the answer....

Your employees have a 12-month annual leave cycle. It starts when they begin employment or complete their prior leave cycle.

The Ultimate Guide to Annual Leave says there are three ways to work out the amount of leave you give your employees in each leave cycle:

  1. Grant your employee at least 21 consecutive days of annual leave with full pay in each leave cycle. This equates to 15 working days and six weekend days (i.e. three weeks of annual leave). This method also applies if he works a six-day week.
  2. Grant one day's leave for every 17 days worked in the leave cycle.
  3. Grant one hour's leave for every 17 hours worked in the leave cycle.

Remember: You must reach an agreement with your employee to work out his leave if you use the last two methods.

Now that you know how to work out the amount of leave to give your employees in each leave cycle, let's find out whether or not you must pay your employees when they take annual leave.

The Basic Conditions of Employment Act (BCEA) says you MUST pay your employees when they take annual leave

You must pay your employees leave pay equivalent to (at least) the remuneration they would have received if they'd worked during the period of leave.

You must calculate annual leave pay at your employee's normal rate of remuneration immediately before the beginning of the annual leave period.

Remember that remuneration includes more than just your employee's salary. It includes other payments such as commissions, certain allowances and other amounts.

Essentially, you can't pay your employee less just because she's taken leave.

When must you pay your employees their leave pay?

You must pay your employees their leave pay either before the beginning of the period of leave or by agreement, on their usual pay day.

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