Advice
Holiday Pay for Freelance Directors
The Working Time Regulations (WTD) entitles all Workers and Employees to a legal minimum of 28 days paid leave each year (5.6 weeks – pro rata’d if you are part-time).
Many freelance directors in the TV and film industry are engaged as workers for the purposes of the Working Time Regulations and are therefore entitled to paid annual leave. The exact entitlement depends on employment status, working arrangements and the terms of the engagement.
However, directors working through their own Personal Service Company (PSC) do not have that ‘worker’ status and are not entitled to this. However, Directors UK advises these directors to negotiate for the same gross payment that comparable worker would do.
Directors UK has successfully approached specific employers with a request that PSC directors the same gross rate as a ‘worker’ director’s ‘rolled up holiday pay’ rate.
The statutory minimum holiday entitlement in the UK is 5.6 weeks per year, subject to a maximum of 28 days. For example, someone working five days per week is entitled to 28 days' paid leave, while someone working three days per week would be entitled to 16.8 days.
For workers with irregular hours, including many freelancers, holiday entitlement is now generally calculated by accruing leave at 12.07% of hours worked. This method was introduced for irregular-hours and part-year workers from April 2024.
Rolled-up holiday pay
Historically, rolled-up holiday pay was considered unlawful because workers were expected to receive pay when they actually took holiday. However, the law has changed. For irregular-hours workers and part-year workers, employers may now lawfully use rolled-up holiday pay.
Rolled-up holiday pay means that holiday pay is paid alongside normal earnings throughout the engagement, rather than when leave is taken. Where this approach is used:
Holiday pay should be calculated at least 12.07% of pay.
It should be paid at the same time as normal wages.
It should be shown as a separate item on the pay slip or payment statement.
Even where holiday pay is rolled up into regular payments, workers remain entitled to take their statutory holiday. Employers must still ensure that workers have the opportunity to take that leave.
Checking your entitlement
Employment status in the screen industries can be complex, and the correct treatment of holiday pay will depend on the nature of the engagement. Directors should therefore review their contract carefully and seek advice if they are unsure whether holiday pay is being calculated correctly.
For the latest government guidance, see:
GOV.UK: Holiday Entitlement Rights
GOV.UK: Holiday Entitlement Pay Calculations