Furlough and holidays – the rules

May 24, 2021 | Business support hub, Payroll

Holiday pay

As we head towards the holiday season, and with restrictions lifting, employers should be aware of the rules surrounding furloughed employees.

  • Furloughed employees continue to accrue leave as per their employment contract.
  • You can only place employees on furlough if coronavirus is affecting your operations.
  • You should not place employees on furlough just because they are going to be on paid leave.

The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.

Employees can take holiday whilst on furlough. If they are flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.

You should not put your employees on furlough for a period just because they are on holiday for that period. This means that employees should only be placed on furlough because your operations have been affected by coronavirus and not just because they are on paid leave.

Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme – GOV.UK (www.gov.uk)

If you need further information regarding this area, please email info@thomsoncooper.com.

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