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How leap year 2020 effects your business

This year is a leap year, with an extra day on 29th February. Does this mean an extra day of pay for your employees? We want to prepare you and your HR managers, with answers to the questions you may be asked by your staff.  We’ve outlined some helpful answers to common questions about how leap year 2020 effects your business. 

Here are the top 3 questions that always get asked, every 4 years, when leap year comes around.  Let’s take a look at some of these questions and, importantly, how to answer them.

Q: During a leap year, will I get an extra day’s pay in 2020?

A: Unless you have a clause in your contracts of employment covering leap years (which is very unlikely) the answer depends upon whether the relevant staff are salaried or hourly paid.

  • Salaried staff - Salaried staff are paid an annual salary in equal monthly payments and will not be entitled to extra pay.
  • Hourly paid staff - Hourly paid staff are entitled to be paid for the work they do irrespective of the number of days in the year.

Q: In a leap year, will I get an extra day’s holiday in 2020?

A: The number of days in the year does not have any impact on holiday entitlement, so no additional holiday is due. Using an online HR system like Breathe will help make managing holiday allowance easier. 

Q: How does a leap year effect weekly pay periods?

A: The addition of the extra day has an impact on weekly pay periods. In a normal year of 365 days, there will be six days of the week that occur 52 times and one day that occurs 53 times. In a leap year, such as 2020 with 366 days, there will five days of the week that occur 52 times and two days that occur 53 times (Wednesday and Thursday).

If salaried staff are paid weekly or fortnightly this will result in additional pay periods in the year depending upon the day of the week they are paid.

You have two ways of dealing with this. Either simply pay the extra period at a cost to the business, or prorate salaries across 27 instead of 26 pay periods.

If you have further questions relating to leap year 2020 or any HR questions, we are happy to help. Call our helpline and speak to one of our experienced consultants. Learn more about our Helpline

 

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