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How Does Furlough Affect Annual leave?


As a result of the coronavirus outbreak, thousands of workers across the UK have been put on furlough, a form of lay off, and asked to stop working as employers cannot cover wages costs.

But what about annual leave? HMRC guidance indicates that employees continue to accrue annual leave during furlough, and are also able to take annual leave while they are on furlough. Employers can still claim 80 per cent of their wages through the government’s Coronavirus Job Retention Scheme during holiday leave. The guidance states that employees must be given their usual holiday pay for any days they take, meaning they should still be paid at their full normal rate of pay, or, where their rate of pay varies, it should be calculated based on their average pay received over the previous 52 working weeks.

The amount of holiday employees get each year is dependent on the type of contract they are on, with full time workers in the UK entitled to a minimum of 28 days paid holiday per annum. Zero hour, casual and agency workers also receive the same paid holiday entitlement, based on average hours they have worked; while part-time workers’ holiday includes the number of days worked per week multiplied by 5.6.

HMRC have advised that employers may, at their discretion, allow employees affected by Coronavirus to carry over unused annual leave of up to 4 weeks into the next two years.

An employee can request to cancel any previously booked holiday, although employers can still insist they take the time off. Employers are also able to insist that annual leave is taken before, after, or during furlough, so long as the correct notice is given of the requirement to take leave. For advice on HR matters, including annual leave, please get in touch louise@robinsongracehr.com


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