Will my employees accrue holiday allowance during a furloughed absence?

Author
Kevin Lau
Associate | Foot Anstey
3rd April 2020

As a result of the coronavirus pandemic does the new government furloughing scheme mean my employees will accrue holiday allowance during their absence?

Generally, annual leave continues to accrue even during periods of absence from work such as maternity or shared parental leave, on the basis that most terms and conditions (including holiday) remain in force during those absences. 

As there is no express government guidance on this point, it would be sensible to treat furlough in the same way; that is, any furloughed employee will continue to accrue holiday allowance during their absence.

As the CJRS requires employees to be furloughed for at least three weeks, one grey area for employers is likely to be whether an employee taking annual leave during furlough will trigger a break in that three week period and, if so, whether this will mean that employers will not be able to claim the grant for that furlough period. In present circumstances, more risk-averse employers may wish to avoid agreeing requests for annual leave until at least a three week block of furlough has been completed. 

Additionally, employers should remember that employees should receive their usual (non-furlough) pay whilst on annual leave. Astute employers may also decide that annual leave should be taken in blocks of a whole week so as to avoid the administrative payroll headache of having to calculate different rates within a particular pay period.

Finally, whilst we await further government guidance on using holidays during furlough, employers should note that the government has recently amended legislation to enables employees to carry over four weeks' unused annual leave (the four weeks provided by EU legislation), to the next two holiday years.

About the Author

Kevin Lau is a member of Foot Anstey’s employment team and an experienced adviser to clients on employment law matters and day to day HR issues. He has worked with both small employers without an HR officer, as well as larger organisations with several HR sub teams.

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