Holiday entitlement and pay during coronavirus
The government has issued new guidance on how holiday entitlement and pay operate during the coronavirus pandemic. It is designed to help employers understand their legal obligations, in terms of workers who:
- continue to work
- have been placed on furlough as part of the government's Coronavirus Job Retention Scheme
Some of the key points are as follows:
Workers on furlough can take holiday without disrupting their furlough. The notice requirements for their employer requiring a worker to take leave or to refuse a request for leave continue to apply. Employers should engage with their workforce and explain reasons for wanting them to take leave before requiring them to do so.
If an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.
If a worker on furlough takes annual leave, an employer must calculate and pay the correct holiday pay in accordance with current legislation. Where this calculated rate is above the pay the worker receives while on furlough, the employer must pay the difference. However, as taking holiday does not break the furlough period, the employer can continue to claim the 80% grant from the government to cover most of the cost of holiday pay.
Carrying leave forward
Some important changes have been made.
For non-furloughed workers, where it has not been reasonably practicable for the worker to take some or all of the 4 weeks' holiday due to the effects of coronavirus, the untaken amount may be carried forward into the following 2 leave years. The government has given some examples of what 'reasonably practicable' might mean.
Workers who are on furlough are unlikely to need to carry forward statutory annual leave, as they will be able to take it during the furlough period. However, the furloughed worker may be able to carry their leave forward for the two-year period if their employer has not been able to pay them the correct level of holiday pay during the furlough period.
The government makes the point that the guidance should not be treated as legal advice. Employers and workers should always check individual contracts of employment and seek specialist advice if required.
We would again point out that it is vital for employers to ensure that they comply with their obligations under the scheme and the government guidance is being regularly updated.
To discuss this or any other employment related matter, contact us.