11 August 2020

Holiday entitlement, pay and furlough – what are my employees entitled to?

The pandemic has caused mayhem for businesses around the world. In the UK, the Chancellor has rolled out a furlough scheme that you have probably already implemented. But you will still need to work out, holiday pay and those entitled to leave. We’ll explain what your employees are entitled to during the pandemic for however long the lockdown continues in one form or another. The following guide will help employers who have furloughed employees as well as employees who have remained working.

Coronavirus and holiday entitlement 

Most workers in the UK will have, on average, a 5.6 week’s paid holiday per year. This is mandatory which all employers must provide. But many employees could have additional holiday entitlements which feature in their contract. Workers cannot be required to use up their holiday while they are ill and on sick leave. 

Furloughed workers and holiday entitlement

While on furlough, employees will accrue holidays and also, take holidays while not affecting their furlough. If you need a worker to take some of their statutory holiday while they are still in furlough, it’s required from you to consider whether they will actually be enjoying their holiday i.e. leisure time, relaxation opportunities. As everyone is self-isolating, keeping their social distance, an employee that is sick may have trouble getting decent rest. Which of course means that the fundamentals of having a holiday are not achieved. 

But are any workers on furlough allowed to take off bank holidays?

If a bank holiday does happen to fall in the period of time that your workers are on furlough, but they would be working on that day anyway, furlough will not be affected by it. But, if the employee would have had leave on the date, you will have two options at your feet.

  1. The bank holiday can be pushed back to a later date
  2. The employee may also take the bank holiday as part of their statutory leave

How much holiday pay are workers entitled to?

The big question. Holiday pay always depends on the number of hours they work and how much they are paid for that work. It doesn’t matter whether they are furlough or they are still working for you, holiday pay still continues and should be worked out using the government guidance on this subject.

Note on furloughed workers and holiday pay 

It’s really important that you make the correct calculations for your furloughed workers regarding their holiday pay. Employers don’t need to pay the box standard rate to employees while they are receiving furlough. Employers can pay the usual rate to employees if they wish. However, it’s within your interest to pay any of your workers that are on furlough and who then take their annual leave, the correct amount using the government guidelines. 

If the holiday pay is higher than the pay they get on furlough, you are obligated to pay the difference. Taking a holiday will not affect their furlough period so you can claim the normal 80% of the grant from the government which covers the cost of holiday pay as well.

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important notice

Howell Jones solicitors continues to be open for business during the COVID-19 pandemic.

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