The law on holiday pay changed as of 6 April 2020
Increasing the reference period – previously, where a worker has variable pay or hours, their holiday pay was calculated using an average from the last 12 weeks in which they worked and earned pay. This reference period has been increased to 52 weeks.
If a worker has not been in employment for long enough to build up 52 weeks’ worth of pay data, the weeks data available should be used.
Limiting how far back employers should look – prior to 6 April 2020 employers looked back as far as necessary to get 12 weeks’ worth of pay data for the reference period. From 6 April 2020 to prevent employers having to look back more than 2 years a limitation on how far back employers should look has been introduced. Any weeks that are before the 104 complete weeks prior to the first day of worker’s holiday are not included. More information can be found here: Calculating holiday pay for workers without fixed hours or pay