The government has published an explanation of how holiday entitlement and pay operates differently to normal during the pandemic.
Workers who have been placed on furlough continue to accrue statutory holiday entitlements and any additional holiday provided for under their employment contract.
Furloughed workers can also take holiday without it disrupting the Coronavirus Job Retention Scheme (CJRS).
Employers can require workers to take holiday and cancel a worker’s holiday, if they give enough notice to the worker:
Employers can ask workers to take or cancel holiday with less notice, but need the workers’ agreement 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.
There is no statutory right to time off for bank holidays. Employers can include bank holidays as part of a workers’ statutory holiday entitlement if they choose, but do not have to do so.
Where necessary, employers can require workers who would usually take bank holidays as holiday to work instead, using the standard notice periods. Employers must still ensure that the workers receive their statutory holiday entitlement for the year.
Where a bank holiday falls inside a worker’s period of furlough and the worker would have usually worked the bank holiday, their furlough will be unaffected by the bank holiday. However, if the worker would usually have had the bank holiday as annual leave, there are two options: it is taken as annual leave or deferred.
The amount of pay that a worker receives for the holiday they take depends on the number of hours they work and how they are paid for those hours. The principle is that pay received by a worker while they are on holiday should reflect what they would have earned if they had been at work and working.
Holiday pay, whether the worker is on furlough or not, should be calculated in line with current legislation - see the standard guidance, based on a worker’s usual earnings.
An employer should not automatically pay a worker on holiday the rate of pay that they are receiving while on furlough, unless the employer has agreed to not reduce the worker’s pay while on furlough.
If a worker on furlough takes annual leave, an employer must calculate and pay the correct holiday pay in accordance with current legislation - see the standard guidance. 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 percent grant from the government to cover most of the cost of holiday pay.
Read the full guidance here, to find out how to carry over annual leave into the coming years.