22nd Sep '23
The Freeport Upper Secondary Threshold allows businesses operating within a freeport to claim tax relief for employees who meet certain criteria.
Between June to December of 2022, 61 companies across the UK trialled the four-day working week. As a result, 92% of the employers that took part decided to continue the arrangement, leaving only five companies reverting to the five-day week. With such high success rates, many businesses across the UK have the bug to introduce the four-day workweek for employees.
Before your business reviews the adoption of a four-day working week, there are a few things you need to know.
As a concept, it’s self-explanatory; businesses shift their operations from five days to four. The four-day workweek entitles businesses to choose the days of operation and, as working days typically exclude Saturday and Sunday, it offers workers an additional day away from work without classing it as leave. However, whilst it’s an easy topic to grasp, implementing it can be much trickier.
There are many ways to approach a four-day working week, which gives businesses with varying operational times or business models more flexibility. Two important things to note are that workers must still be paid at 100%, and employers must offer a meaningful reduction in work time.
For some companies, this could involve completely compressing the working week, halting business operations once a week or devising a rota for staff. Employees will then make up working hours across the week or the year. Alternatively, businesses might cut down to around 28-30 hours a week without employees working longer days elsewhere. This method will mean employees lose days from their holiday allowance instead.
The right approach will depend on your business model. Here are some ways you could consider offering the four-day working week across your business:
Instead of measuring it weekly or based on performance targets, employers will contract their staff to work 32 hours each week on average. Businesses with significant seasonal peaks, such as restaurants, can use the method to ensure their staff are available during their busiest periods and reward them with recuperation time during their quietest. As an option, this also works well for those in Events who might work weekends or longer hours during events seasons.
Employees who want to partake in the four-day working week must meet a set of criteria outlined by their employers. For example, a sales department might hit the monthly quota and earn the four-day week, or a finance department might be behind on reporting, meaning they work a five-day week. This approach could complicate operations, but it does ensure that critical business targets are achieved before the four-day week can be claimed.t
As a rule, decentralised will work for large corporations or environments with varying working patterns. It enables any company to pick a hybrid model for their workplace, such as conditional and annualised four-day week practices.
For example, you could have a large business with different departments that all have their objectives to reach. In this example, a sales team must meet their quota by the 23rd of the month, whereas the marketing department must deliver a high-priority campaign by the 4th of the month. The decentralised rule enables employers to mix any models so the four-day working week can thrive in their company.
Employers will see all operations shut down one additional day every week. It is also known as the traditional “every Friday off” rule. Throughout the week, employees will be given their allotted tasks and time to complete them. The business will then make arrangements for operations to pause. Many types of companies can successfully implement the four-day week, such as solicitors, banks or talent agencies.
The staggered model enables the four-day working week to happen on a rota basis. Companies guaranteeing continual service to customers might utilise this rule to ensure there is never any shortfall. It also means every team can have an extra day off fairly.
Despite the successes experienced by companies trialling the four-day week, no legislation in the UK enforces it. In October 2022, the Labour Party proposed reducing the maximum working hours to 32 without a reduction in pay. This proposal is the closest the topic has made it into the Houses of Parliament, but it’s unlikely to go any further for now.
Instead, employers who adopt the four-day working week will do so per pre-existing legislation, such as holiday entitlement and maximum working hours. As part of this, businesses will also need to consider:
In the UK, legislation states that employees must not work more than 48 hours within seven days. There are often exceptions to this rule, but these are for jobs requiring 24-hour staffing or those stationed overseas. Some employees can also opt out of this scheme, enabling them to work more hours across the week. Depending on the circumstance, this could be for a predetermined period or indefinitely. For employers, it’s important to know that this is an employee’s choice. Employers can ask employees to opt out but if they refuse, employees can’t be fired because of this decision.
Individuals can register requests for flexible work with their employers once they have been an employee for at least 26 weeks. As the four-day working week doesn’t have legislation in place, any requests for flexible working will need to be considered before the four-day week and following Government guidelines.
The only downside for employers is that businesses might have several employees working in different patterns. Therefore, HR software might offer greater ease for companies hoping to manage this.
The maximum statutory holiday entitlement for employees working five days a week equals 28 days across the year. Some companies offer additional paid leave on top of this as an incentive for employees, but it’s not a legal requirement to do so. Depending on how the four-day week is approached, it could affect an employee’s holiday entitlement. For example, businesses offering a fifth-day stoppage without extending the working day across the week will reduce employee holiday entitlement.
Alternatively, filling four days with five days’ worth of work ensures all employees still receive the same holiday entitlement as before. As the total number of working hours hasn’t changed, employers must continue to offer their staff the same holiday entitlement.
Employers are often more generous with break times than the law requires them to be. In many cases, employees benefit from an hour’s break when employers only need to offer a total of 20 minutes.
When implementing the four-day working week, employers can reduce lunch breaks down to the legal requirement. However, before doing so it’s worth reviewing if this is going to be safe for your employees. Where additional working hours could be extended onto a day, without appropriate rest breaks, it could increase the likelihood of accidents or mistakes made at work.
It’s important to note that, despite all the trials, companies won’t know what a four-day week looks like for their business until they test it. Of the employers that have implemented it into their way of working, many have reported the following benefits and disadvantages.
Workplaces adopting a four-day workweek could have happier and healthier employees. In one study, over 40% of employees felt an improvement in their mental health with 71% reporting lower levels of burnout too. Done right, employers could reap benefits including reduced presenteeism and absenteeism.
There are so many ways a four-day workweek can offer enhanced work-life balance. Overall, employees could enjoy more time spent with their families, as well as enhanced boundaries. This gives employees a clear division between working and leisure hours.
One company that’s had tremendous success with this is Microsoft. In 2019, their Japanese site introduced a three-day weekend throughout August. As a result, productivity was boosted by around 40%.
The four-day working week can only benefit certain types of people, but it’s unlikely that you’ll please your entire workforce. You might introduce a four-day work week, but the consequence could mean a 10-hour working day, which already poses an issue for people with families, important hobbies outside of work or those who value their downtime. Similarly, reducing an employee’s hours will result in their annual leave allowance being altered.
Despite being a potential advantage, without the right strategy in place the four-day week could also harm productivity objectives. For companies choosing to compress five working days into four, there’s a risk it could majorly impact productivity levels within your teams. As the days become longer and employees become tired, this can cause an increase in mistakes in the workplace.
Having a long weekend every week can seem incredibly attractive to employees. However, compressing hours can come at a cost. Your employees might be expected to work longer days or take shorter breaks, which has been known to cause stress and burnout, especially around tight deadlines. Around 22% of workers expressed that they already had far too many jobs and responsibilities on their plate to be able to adjust to a four-day working week. Compressing five days’ worth of work into four will only increase the burden for those employees.
If you’re ready to consider the four-day workweek for your business, you’ll need to ensure you have everything in place to implement it.
You’ll need to ensure you’ve done the following:
Depending on the model you choose, you might need to consider adopting payroll and HR software to help you keep tabs on the changes. The right software will help you determine which employees are currently working as well as those with flexible working arrangements. In addition, you’ll be able to keep track of holiday allowance, your normal payroll processes and also monitor how the four-day week is working for you.
Whatever your motivations for introducing a four-day workweek, you need to ensure this is communicated across your teams. You may receive mixed reactions, especially as a four-day workweek might not work for everyone on board. It’s important to consider these points and offer reassurance to your teams. This is something that needs to work for both parties.
With so much to consider before adopting the four-day working week, you need trusted and compliant software to support you along the way. At Staffology, we offer our customers intuitive cloud-based payroll software that gets every detail right, meaning your employees feel secure and protected when change happens.