This is how furlough affects annual leave - and if you can accrue holidays

Thursday, 23rd April 2020, 5:42 pm
Updated Tuesday, 12th May 2020, 12:50 pm
Employees must be given their usual holiday pay for any days they take in line with Working Time Regulations (Photo: Shutterstock)

Thousands of workers across the UK have been put on furlough as a result of the coronavirus outbreak.

Furloughed workers are those who have been asked to stop working as their employer cannot cover the costs of their wages, but have not been made redundant.

People who have been put on furlough should not undertake any work for their employer during this period, even though they are still employed.

But what about taking annual leave? Here’s what you should know.

What happens to annual leave while on furlough?

HMRC guidance indicates that employees are able to take annual leave while they are on furlough, and can still claim 80 per cent of their wages through the government’s Coronavirus Job Retention Scheme.

The guidance states that employees must be given their usual holiday pay for any days they take, in line with Working Time Regulations (WTR).

This means 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.

If an employee opts to take annual leave during a period of furlough, their employer is required to top up over the 80 per cent that is received back through the government’s job retention scheme.

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 year.

Zero hour and agency workers also receive the same paid holiday entitlement, based on the average hours they have worked, while part-time workers’ holiday includes the number of days worked per week multiplied by 5.6.

Employees will get 80 per cent of their wages from the government, and their employer will most likely top up their pay to meet their holiday pay obligations.

The furlough scheme was originally meant to end in June but the Chancellor has now extended the scheme until the end of October.

Rishi Sunak announced on Tuesday (12 May) that no changes will be made to the scheme until the end of July, with the three months after this point continuing with more flexibility.

Mr Sunak said employers will be able to bring workers back on a part-time basis and the government will require employers to make a contribution.

However, employees will continue to get the same support they do now, receiving 80 per cent of their wages.

Can annual leave be carried over to 2021?

Employees may be allowed to carry over any unused annual leave into next year, although this decision will ultimately be at the discretion of their employer.

The government has recently introduced a new temporary law that enables workers to carry over up to four weeks’ paid holiday over a two year period.

This law has been introduced to support workers who have been affected by coronavirus, such as those forced to self-isolate, or key workers who have had to cancel holidays in order to keep working.

According to ACAS, this new law applies for any holiday an employee doesn’t take because:

- they’re self-isolating or too sick to take holiday before the end of their leave year

- they’ve had to continue working and could not take paid holiday

- they’ve been 'furloughed' and cannot reasonably use it in their holiday year.

Acas says that furloughed workers are covered by the new two-year holiday carry over law, but HMRC are yet to implement the scheme.

Additionally, if an employee leaves their job, or is dismissed, and has carried over paid holiday due to coronavirus, any untaken paid holiday must be added to their final pay.

What about previously booked holidays?

If an employee already has a holiday booked and is no longer able to take it, due to flight or hotel cancellations for example, their employer can still insist they take the time off.

However, an employee can make a request to cancel their holiday days, but will need to get agreement to do so.

What happens if I need to take time off to look after someone?

Employees are entitled to take time off work to help someone who depends on them - a ‘dependant’ - in the event of an unexpected event or emergency, including situations related to coronavirus.

A dependent does not necessarily have to live with the person, and could be a relative or elderly neighbour who relies on them for help.

While there is no statutory right to pay for this time off, some employers may offer pay depending on the contract or workplace policy.

If a dependent, such as a partner, child or relative, in the same household gets coronavirus symptoms, they should receive Statutory Sick Pay as a minimum for this time.