One Source News

Notice for all Managers of Casual Workers

Changes in how casuals are paid holiday pay

New automated process arriving 01 February 2026

Casual workers are entitled to claim rolled up holiday pay and this will be automated and paid to them in their monthly pay from 01 February 2026 onwards.

Each time a casual worker claims pay through OTL against any of the below pay elements, they will receive a top up payment equivalent to 12.1% of the claimed for  hours they have worked.

Pay element 401

Pay element 421

Pay element 424 (zero hours contracts only)

Managers must ensure they only approve claims submitted by casual workers that are against the correct casual worker elements (or this could lead to incorrect payments that don’t include the correct holiday pay top up). Guidance for all elements can be found within the OTL guide How to create an OTL claim.docx.

Holiday pay continues to accrue and be paid to casual workers when they are on periods of sickness or statutory leave and any eligible holiday pay will also be automated when managers update One Source to say a worker is on sickness or statutory leave. Holiday pay for sickness or statutory leave will be automated from 01 March 2026.

What do managers need to do?

1. 1.If you have been submitting spreadsheets or emails to payroll to claim holiday pay (506) for your casual workers – you no longer need to do this from the 01 February 2026. Payroll will issue further guidance separately on how managers should process unpaid leave claims that were previously included on the same spreadsheet.
2. When approving OTL claims for casual hours worked, it is important to check that the casual worker is claiming their hours against the correct elements – these are the only elements that will pay the 12.1% top up. Guidance on the elements and when they should be used is available within the OneSource guidance for overtime – How to create an OTL claim.docx
3. Managers should ensure that casual workers are aware of the correct elements they should use when submitting claims to ensure they receive appropriate holiday pay. The 12.1% holiday pay top up will be shown separately and marked as holiday pay on payslips.
4. Casual workers continue to accrue holiday pay when they are off sick or on periods of statutory family leave (such as maternity etc…) and are entitled to receive holiday pay during these periods. To ensure casual workers receive this holiday pay, managers must update One Source without delay when casual workers take sickness or statutory leave.
5. When you no longer require casual workers to do any work, they must be made a leaver on One Source to limit such pay liabilities. A leavers notification form must be completed and sent to payroll.

What should managers do if they have not previously submitted any spreadsheet or email claims to payroll for casual workers to receive their holiday pay?

If casual workers have not previously been paid their holiday pay, the outstanding pay owed to them will be back dated to April 2024 and automatically paid to casual workers in their February pay.

All managers must follow points 2-5 above from the 01 February 2026 to ensure their casual workers receive the correct level of pay to which they are entitled.

Please note that any back pay will be covered by service areas budgets and so if you think you may have some back pay liability for casuals’ holiday pay you are advised to make your finance business partners aware of this.

Next steps

Managers should ensure all casual workers are aware of the change and the importance of ensuring they use the correct pay elements in OTL to receive their eligible holiday pay.

Managers should cease submitting spreadsheets or emails to payroll for holiday pay claims from 01 February 2026.

Line managers can view their casual workers on their team structures on One Source.  Managers should keep these under review and submit leavers forms to payroll to end any casual workers they are no longer using.

Managers are also reminded that casual workers should only be used on an ad hoc basis, where work is irregular and unpredictable (defined where the hours are ‘wholly or mostly variable in each pay period’).

If managers have any queries or questions relating to the use of casual workers within their service areas or holiday pay entitlements for casuals, please refer to the Casual Workers pages of the HR SharePoint, which includes our recently updated FAQs or contact the HR Operational Team by raising a helpdesk ticket in One Source How to raise a helpdesk ticket.

An initial communication was sent out via Inside Walsall and an all-manager email in October 2025 which contains further information regarding rolled up holiday pay for casuals (introduced in April 2024 through amended government regulations). Click here to view the initial communication for further information.