COVID-19: Holiday and Furlough - 5 key points you need to know

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Full details of how we can help you around COVID-19 / Coronavirus is available on our special page (www.frenchduncan.co.uk/covid-19) which you can access by clicking here. We will be keeping all our information updated as things progress and schemes are clarified, so please check back regularly, or follow us on Twitter or LinkedIn to keep informed of all the changes. 

The below blog refers specifically to Furlough and Holidays, if you haven't yet read our 10 Step Guide to Furlough and the Job Retention Scheme, we'd recommend doing that first by clicking here.  You can also access our FREE TEMPLATE documents all about furloughing staff by clicking here.

 

COVID-19: Holiday and Furlough - 5 key points you need to know!

Written 22nd May 2020.

Holiday and Furlough – 5 key points you need to know

The position with holidays and furlough has remained a bit of a mystery until the HMRC’s most recent update to their guidance on 13th May 2020. 

 

  1. Accruing Holidays on Furlough

The guidance has confirmed our view that employees will accrue holidays as normal whilst on furlough given they remain employed.  

 

  1. Taking Holidays on Furlough
  • The government have clarified that employees CAN take holidays whilst on furlough without disrupting their period of furlough and employers can require that holidays are taken as long as they adhere to the statutory notice periods for doing so. The notice period is double the length of the holiday the employer wishes to require a worker to take on particular days e.g. for a 5 day holiday they must be given at least 10 days of notice.
  • If you are issuing a furlough agreement then you can add your holiday rules into the agreement but if you have already issued your furlough agreements, then we would advise you write to your employees and confirm any new and updated holiday rules. You may for instance require all employees to take 5 days holiday by the end of July, or for employees to take the holidays they accrue each month they are on furlough.
  • The guidance advises that employers should consider if their furloughed workers are able to enjoy the rest and relaxation that a period of holiday would normally allow based on any restrictions they may currently be under, such as self-shielding or self-isolating. You may need to look at individual circumstances where appropriate when enforcing holiday rules.

 

  1. Paying Holidays on Furlough

Employees should receive their normal pay for holidays, so what they would have earned if they had been at work and working. If you are paying 80% and you are requiring employees to take holidays whilst on furlough, you will need to ‘top up’ the employee’s pay by 20% for their holiday days – the government will only reimburse the 80% for this as with other wages. If the employee has irregular hours and variable pay, their pay should be based on an average of the last 52 weeks remuneration excluding weeks where they had no earnings.

 

  1. Holiday Carry Forward

There is new temporary legislation allowing employees to carry over holidays over a 2 year period for holidays when it was not reasonably practicable for a worker to take these holidays due to the coronavirus.  Employers should still be encouraging all employees to take holidays throughout the year as it is important that all workers are able to rest, but this amendment will be particularly helpful for key workers. It is unlikely that furloughed workers will need to carry over holidays as they can be taken when on furlough leave, but if you cannot afford the top up to 100% pay, employees should be able to take these holidays when they return to work or carry them over.

 

  1. Holiday Cancellations:

It is likely many employees will have booked leave in the Summer holidays, and will now want to cancel them as they may not be able to travel abroad. If you wish employees to still take these holidays, then you do not have to accept their request to cancel.

If an employer decides that they wish to cancel an employee’s holiday due to operational reasons then they must be given notice which is the length of the employees planned holiday. If they had booked one week off then you must tell them at least one week before that they are now unable to take this time off.

 

The full guidance can be found here: https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavirus-covid-19

 

How French Duncan can help

The French Duncan HR team are on hand to help you in implementing furlough and other measures to survive the current crisis. 

If you would like to arrange a free telephone consultation with our HR team or discuss resources available, please contact 0141 221 2984 and we will direct you to our team.

Points of contact:

 

Further Information

For more information on the various others issues and assistance available around COVID-19 / Coronavirus, please visit https://www.frenchduncan.co.uk/covid-19/which now includes some FREE TEMPLATES for Furloughing staff.

Here you will find information HMRC deferralsbusiness loans including Coronavirus Business Interruption Loan Scheme (“CBILS”), personal tax & self-assessmentdebt assistance & restructuring and much more. You can also find contact details of the key staff able to help you further. 

 

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