Who is covered by the definitions of irregular hours workers and part-year workers in the Working Time Regulations 1998?

Changes to the calculation of holiday entitlement and payment of holiday pay for irregular hours workers and part-year workers apply to leave years beginning on or after 1 April 2024.

The Working Time Regulations 1998 include definitions of these workers:

• A worker is an irregular hours worker, in relation to a leave year, if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable.
• A worker is a part-year worker, in relation to a leave year, if, under the terms of their contract, they are required to work only part of that year and there are periods within that year (during the term of the contract) of at least a week which they are not required to work and for which they are not paid.

There are some areas of uncertainty arising from the wording of the definitions.

The Government has published guidance, which includes examples of what the definitions might mean in practice. However, as the government guidance is non-statutory, courts and tribunals will not be required to take it into account and could interpret the definitions differently to the guidance.

To determine if a worker is an irregular hours worker, the employer should look at the worker's contractual terms at the start of the leave year and identify if "in each pay period" their hours will be "wholly or mostly variable". Arguably this means that if there is any pay period during the year when their hours will be fixed, or less than 50% of their hours will be variable, they will not meet the definition for that leave year.

Term-time workers who do not earn wages in relation to the periods (during the school holidays) when they are not working, but whose salary is paid in equal instalments throughout the year, are likely to meet the definition of part-year workers. The legislation requires that there are periods that they are not required to work and for which they are not paid. Although such a worker receives pay during school holidays, the pay is not for that period.

The government guidance was changed on 1 April 2024 to reflect this position. The guidance previously took the view that such a worker would not meet the definition of a part-year worker. 

Employers should carefully assess their contractual relationship with individual workers at the beginning of each leave year (beginning on or after 1 April 2024) to determine if they fit either definition.