The Government has issued new guidance on furlough and holiday pay, clarifying potential issues in an update published by the Department for Business Energy and Industrial Strategy (BEIS).
Last month the Government confirmed that workers who have been furloughed through the Coronavirus Job Retention Scheme (CJRS) could take annual leave without breaking furlough, but there remained issues over whether an employer could require staff to take annual leave.
The guidance has confirmed that furloughed workers continue to accrue statutory holiday entitlements, as well as any additional holiday as per the terms of their employment contract.
It has now also been clarified that the CJRS does not change whether agency workers accrue holiday, with furlough being treated as time between contracts.
This means that if you normally accrue holiday during this time, you will continue to do so, whether through contractual agreement or the Working Time Regulations.
Employers can require staff to take annual leave while furloughed, as long as the usual statutory notice periods are observed, but the guidance advises employers to ‘engage with their workforce’ and explain the reasons for asking them to take leave before doing so.
It has also been confirmed that employers can claim through the CJRS for furloughed workers even while they are taking annual leave. However, they are required to make up the difference if the employee is entitled to higher holiday pay than their furlough pay (80 per cent of their salary up to £2,500).
Emergency legislation was passed to allow workers to carry over any holiday they were not able to take this year because of the COVID-19 pandemic, for up to two years, while bank holidays can either be taken as annual leave or deferred if an agreement is reached between the worker and employer.
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