Furlough Holiday Pay

Can an employee take Holiday whilst on Furlough?, this is a common question we have seen being asked, so we thought it would be good to do a quick update on the subject.

The short answer is, yes, holiday can be taken and be forced to be taken whilst on Furlough. Click here for full HMRC guidance, but the relevant section to note from the guidance is;

Taking holiday

Employers can:

  • require workers to take holiday
  • cancel a worker’s holiday, if they give enough notice to the worker

The required notice periods are:

  • double the length of the holiday if the employer wishes to require a worker to take holiday on particular days
  • the length of the planned holiday if the employer wishes to cancel a worker’s holiday or require the worker not to take holiday on particular dates

Employers can ask workers to take or cancel holiday with less notice but need the workers’ agreement to do so.

If you decide to enforce employees to take holiday whilst on furlough here are some main points to note;

  • Holiday has to be paid at 100% of the employees’ usual pay rate for the hours taken.
  • You can still reclaim Furlough grant funds back at 80% based on the standard furlough calculation. Meaning only 20% is liable to be paid by the business.
  • Although it may not be preferable for the employees, from a business point of view, in most cases, it is advisable to enforce holiday is taken.
  • If employees do not agree voluntarily to take holiday you will need to give them the required notice period as stated above.
  • It is now possible for employees to carry forward holiday this year and take when possible over the next 2 years. Employers just need to ensure they document that is what not reasonably practicable (full details in the full guidance here) for the employee to take the holiday.
  • A Business not being able to afford the additional 20% is a reason for Holiday not being reasonably practicable to take to allow carry forward.
  • Being on furlough is not a reason for holiday to not be reasonably practicable to be taken.

I hope this helps answer your questions regarding holiday pay and furlough. If you would like to receive copies of any future updates direct via email, please subscribe here.

Please do not hesitate to contact us if you have any further questions.