Here is an explanation of how holiday entitlement and pay during coronavirus pandemic operates and where it differs from the standard holiday entitlement and pay guidance. Hopefully, this will hopefully allow you to plan for the forthcoming months.
• Almost all workers, including zero-hour contracted workers and those on irregular hours contracts, are legally entitled to 5.6 weeks’ paid holiday per year. The exception is those who are genuinely self-employed.
• Holiday continues to accrue during furlough (without disrupting furlough).
• Holiday can be taken during furlough (or any other time) either at staff request or the employers.
• The employer can designate days to be deemed as holiday. Employers can also cancel holidays as long as enough notice is given.
• The required notice which must be given is double the length of the holiday if the employer wishes to require a worker to take holiday on particular days. Where the employer wishes to cancel a worker’s holiday or not take holiday, the notice is double the length of the planned holiday (less notice can be given in both cases by agreement).
• Bank holidays can be taken as usual or deferred. Where they are taken, normal pay must be given (80% can be claimed under the furlough scheme).
• Holidays must be paid at normal pay. However, whilst on furlough 80% of that can be claimed through the furlough scheme with the employer paying the 20%.
• The underlying principle is that a worker should not be financially worse off through taking holiday. Where a worker has regular hours and pay, their holiday pay would be calculated based on these hours. If they have variable hours or pay, their holiday pay is calculated as an average of the previous 52-weeks of remuneration excluding weeks in which there was no remuneration.
• The government passed an emergency amendment to legislation due to Coronavirus allowing leave to be carried forward into the next 2 leave years (2021 and 22). Carry forward may be considered where it was not reasonably practicable for a worker to take leave as a result of the coronavirus.
• In terms of holidays, employers have the following options : allow requested leave to be taken, require leave to be still taken where previously booked (even if the person no longer needs it), require staff to take leave on designed days (with required notice) or defer holiday and allow it to be carried forward.
• In terms of holiday where furloughed staff have given notice to leave employment, rather than pay any outstanding leave on termination, it makes sense to give staff the required notice to take their leave during furlough and their notice period.
If you have any questions, Hill HR would be happy to help.