Night allowance and holiday pay

Service

Night work obliges the employer to charge and pay the employee additional remuneration on this account. For each hour of work at night, the employee is entitled to an allowance for night hours in the amount of 20% of the hourly rate, resulting from the minimum remuneration for work in a given calendar year.

Is the night time allowance counted towards the holiday allowance?

The night-time allowance paid to the employee also creates an obligation to include it in the holiday pay (including the equivalent for unused holiday leave). The above is aimed at ensuring the employee a fair remuneration for the holiday leave, because during the absence from work, the employee is not able to work out variable remuneration components, which include, inter alia, an allowance for night work or a sales bonus. In short, the pay for annual leave should correspond to the remuneration that the employee would receive for the time actually performed.

Detailed regulations on the settlement of holiday leaves are contained in the Regulation of the Minister of Labor and Social Policy of January 8, 1997 on detailed rules for granting holiday leave, determining and paying remuneration for the holiday and cash equivalent for the holiday (hereinafter: the holiday ordinance).

The practical aspect of accounting for the night work allowance in the employee's holiday pay is presented later in this article.

The method of calculating holiday pay through the prism of night work allowances presented in this article also remains valid in terms of other variable remuneration components paid for a period not longer than 1 month.

How do I determine the additional holiday pay for the night work allowance paid?

When calculating holiday pay, you should take into account, inter alia, variable remuneration components for a period not longer than a month. The calculated holiday pay, in particular, should also include the night work allowance paid to the employee. It is a component of remuneration that is due for a period not longer than a month, and moreover, it is not mentioned in § 6 of the holiday regulation, which contains a catalog of remuneration components that should not be taken into account when determining the holiday remuneration.

Variable wage components, including the nightly hours supplement paid, must be included in holiday pay as follows:

  1. We calculate the amount of the night time allowance which was paid to the employee during the 3 calendar months preceding the month in which the holiday begins (§ 8 (1) of the Holiday Regulation);
  2. We divide the amount of the nightly allowance paid in the last 3 months by the number of hours worked in the periods for which the allowance was due;
  3. The calculated amount of the night-time allowance per one working hour in the period for which the allowance was due is multiplied by the number of hours of holiday leave taken in a given month (§ 9 (1) of the holiday regulation).

In the event of a significant fluctuation in the variable wage components to be included in holiday pay, components for a period not exceeding 12 calendar months prior to the commencement month of the holiday may be taken into account.

A practical representation of the calculation scheme for the holiday pay of an employee who was paid an allowance for night hours is presented in the example below.

Example 1.

The workplace pays employees wages on the 10th day of the following month.

Mr. Janusz, whose basic salary specified in the contract is PLN 3,000 gross / month, took 3 days of holiday leave in April. In the three months preceding the month of the commencement of the leave, Mr. Janusz received an allowance for night work in accordance with the following table:

Period for which the allowance was paid

Period for which the allowance was calculated

Amount of nightly allowance received

Number of hours worked in the month for which the allowance was calculated

March

February

PLN 250 for February, paid in March

February - 120

hours

February

January

PLN 200 for January, paid in February

January - 152 hours

January

December

PLN 220 for December, paid in January

December - 144 hours

SUM

------------------------

670 PLN

416 hours

 For one hour of leave, Mr Janusz should be added PLN 1.61, calculated as the quotient of the amount of the night-time allowance paid in the three months preceding the month of the start of the leave, i.e. PLN 670, and the number of hours worked in the period for which the allowance was due, i.e. 416 h The total additional holiday pay will be PLN 38.64 (24h * 1.61).

Mr Janusz should receive a holiday pay of PLN 488.64 (3000/20 * 3 + 24 * 1.61) for 3 days of leave (assuming that there were 20 working days in April).

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Is the nightly allowance to be included in the equivalent for unused annual leave?

When determining the equivalent for unused vacation leave, one should additionally take into account the special regulations, which were also regulated in the leave regulation in question.

The difference between calculating the equivalent for unused vacation leave and calculating the "normal" leave remuneration is that, in the light of § 16 of the leave regulation, for the purposes of calculating the equivalent for unused vacation leave:

  1. Variable components for periods not longer than one month are paid in the period of 3 months immediately preceding the month of acquiring the right to the equivalent, and are included in the equivalent in the average amount for this period;
  2. If the employee has not worked the full period during this period, the variable remuneration paid to him during this period is supplemented by:
    • dividing the number of working days for which he was entitled to this remuneration;
    • by multiplying the result obtained by the number of days the employee would work within the normal working hours.

The above means that the variable remuneration components (including the allowance for night hours) paid in the period of 3 months immediately preceding the month of acquiring the right to the equivalent, the equivalent for unused vacation leave is assumed in the average amount and, moreover, are supplemented if the employee in a given period has not worked the full scope of his working hours.

The practical aspect of calculating the variable components of remuneration in the equivalent for unused vacation leave is presented in the example below. In order to show the contrast and better understand the discussed matter, the data from example 1 were used.

Example 2.

In April, Mr. Janusz acquired the right to an equivalent for a leave of 3 days (24 hours). In the period of 3 months immediately preceding the month of acquiring the right to the equivalent, Mr. Janusz received an allowance for night hours worked in the amount of PLN 670 (according to the table in example 1). In February, Mr. Janusz was ill, which meant that in the months December - February he worked 52 days (416 hours), instead of 56 days (448 hours), which he should work in accordance with the applicable schedule of working time.

The basis for the variable components of working time, which consists of the night work allowance, must be completed as follows:

- PLN 670/52 days worked = PLN 12.88

- PLN 12.88 * 56 days to be worked in a given period = PLN 721.28.

Finally, the basis should be averaged: PLN 721.28 / 3 months = PLN 240.43 and added to the remaining amount of the equivalent basis for unused vacation leave (PLN 3,000).

Assuming that the holiday coefficient is 21, the equivalent for unused leave to be paid to Mr. Janusz, will be: 3240.43 / 21 * 3 = 462.92 PLN.

Pursuant to § 10 of the holiday regulation, in the event of a change in the variable remuneration components referred to in § 8 or a change in the amount of such components in the period from which the calculation basis is determined, introduced before the employee starts the holiday leave or in the month of taking this leave, the basis of the assessment is determined again taking into account these changes.

Therefore, there may be doubts as to whether the increase in the minimum wage for work at the turn of the year requires the recalculation of the night work allowance, which was calculated for the months of the previous calendar year, and which affects the amount of the employee's holiday pay in the current year.

Comparing examples 1 and 2, we can notice a certain dissonance in the settlement of variable components in the ordinary holiday pay and the remuneration for unused holiday leave.

It should be emphasized that although the subject of this article was to present how the allowance for night hours is calculated, the calculations presented above remain valid on the basis of other variable components, paid for periods not longer than 1 month.