The purpose of this consultation was to gather views on proposals on the role of the Fair Work Agency in enforcing holiday pay and supporting compliance. The consultation is relevant to England, Scotland, and Wales. 

This consultation seeks views on Fair Work Agency enforcement of statutory holiday pay from 2027, including compliance support, enforcement powers, penalties, targeting lower-paid workers and naming non-compliant employers. Our response supports stronger enforcement, alongside practical guidance, SME support, proportionate risk-based action, simpler holiday pay rules and collaboration to improve compliance. 

In our response, the CIPD makes the following recommendations:

  • That clear, practical and accessible guidance must be provided to help employers understand and correctly calculate statutory holiday pay. 
  • That targeted support should be provided for SMEs and outsourced payroll providers, which can lack the specialist HR and payroll expertise
  • That a light-touch, supportive approach must be adopted during the early stages of enforcement, giving employers opportunities to identify and correct errors
  • That enforcement activity should focus on high-risk sectors and occupations where non-compliance is more likely.
  • That firm enforcement action against deliberate underpayment must be undertaken while distinguishing this from genuine mistakes and misunderstandings. 
  • That awareness of holiday pay rights and obligations must be improved through employer education, worker information campaigns, and collaboration with organisations such as the CIPD. 
  • That holiday pay rules and calculations over time should be reviewed and simplified to make compliance easier, reduce administrative burdens, and support more effective enforcement.

Our response to the Department for Business, Innovation, Science and Trade’s consultation: Make Work Pay: Holiday Pay Compliance and Enforcement

Our response to the Holiday Pay Compliance and Enforcement consultation
PDF document 165.2 KB

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