Some employers are not giving staff the holiday pay they are due, according to the labour minister Jason Hayward.

The issue affects the paid leave entitlement for personal service employees who receive commission and people who earn gratuities and services charges.

Mr Hayward said under the Employment (Minimum Hourly Wage) Order 2023, which came into operation on June 1 last year, “employers of personal service employees and employees to which gratuities and services charges form a part of their wages, are permitted to set a basic wage for their staff”.

“This is usually less than the minimum hourly wage rate, but when commission, gratuities and services charges received are applied to this basic wage, it guarantees a minimum hourly wage rate of $16.40,” said the minster.

He added: “Contrary to the Employment Act 2000 some employers are applying the basic wage set in accordance with the order to the statutory leave entitlement of these employees.

“The Employment Act 2000 clearly sets out how to calculate the weekly wage of an employee whose wages vary from week to week, which is to take the average wages earned over the previous 12 weeks or, in the case of an employee who has worked for less than 12 weeks, the average wages earned by him over the time that he has worked.”

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The minister said that, as an example, Employee A has been employed for two years at a basic wage rate of $12 an hour, works 40 hours a week and is paid weekly.

With the addition of gratuities and service charges, Employee A’s weekly wage varies from $656 [$16.40 an hour] to $820 [$20.50 an hour].

To ascertain Employee A’s leave entitlement, the employer should take the average of the previous 12 weeks worked.

“Additionally, there are some employers who have incorporated leave entitlement into the overall remuneration of their employees, which is also contrary to the Employment Act 2000, as employees should receive paid leave when the statutory leave is taken,” said Mr Hayward.

“For example, an employee cannot agree to a higher rate of commission in lieu of paid sick and/or vacation leave.

“Employers have an obligation to pay employees for their leave when it is taken.”

Employees who feel that they are being paid incorrectly should contact the Department of Labour by e-mail at departmentoflabour@gov.bm or on 297-7716.