The government have confirmed that employees can take holiday during furlough. Allowing them to do so will not prejudice your right to reimbursement under the Coronavirus Job Retention Scheme (CJRS).
But that’s not likely to be the government’s last word on holidays so tread carefully and don’t over promise. Here’s what you need to know as things currently stand:
- An employee can take holiday during furlough and continues to accrue holiday during furlough. This applies to bank holidays and statutory minimum holidays
- If they take holiday their pay for each day’s holiday should be 100% of ‘normal pay’ – you’ll receive the 80% CJRS contribution (up to the £2500 monthly cap) in respect of that day’s holiday but you’ll be required to top up the rest (see our FAQs on how to calculate holiday pay for furloughed employees)
- The guidance and Treasury Directive has remained silent on whether you can require employees to use their holiday during furlough so you cannot assume that enforced holiday will be reimbursed. You are entitled to decline holiday requests if business needs mean you can’t accommodate them
- The government has included a caveat (a large one at that!) to say they ‘are keeping the policy on holiday pay during furlough under review’, meaning there remains the possibility of an about turn at your expense
- Clearly if you want to avoid being out of pocket in respect of holidays you could require employees to postpone holidays until just before or just after a furlough period. Alternatively you could agree with your furloughed employees to reduce their holiday entitlement and/or holiday pay (provided that you don’t fall below statutory minimums)
If you don’t already have access to our FAQs document (£250+VAT), click here and we’ll send you across a copy. It’s over 45 questions with detailed answers, guidance and insight on the Scheme and the employment law you’ll need to consider.
Government guidance regarding coronavirus is continually updating. This update was produced on 22 April 2020 and is accurate and compliant with government guidance at the time of production.