The UK Employment Appeal Tribunal ruled that non-guaranteed overtime must be included in holiday pay calculations, allowing employees to submit backdated claims for unpaid holiday pay covering up to two years. This impacts about 1 in 6 UK employees and has serious ramifications for businesses. Employers can limit their exposure by calculating holiday pay based on the average overtime from the previous 12 weeks, using a two-tier system for payment, or paying an additional percentage of non-guaranteed overtime to reflect statutory leave entitlement. Employers must also budget for potential backdated claims and consider alternatives to overtime such as using agency staff.