Workers continue to accrue holidays while on furlough, including any additional holiday provided for under their employment contract
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. Therefore this could be mounting up while your staff are now working.
Some of our clients are worried that when they can eventually get to reopen their doors that the employees that have had these months off in furlough will then ask to take their holiday. Putting even more strain on the business.
I just wanted to let all our clients know that if you are one of these businesses and are worried about the holiday entitlement mounting up while you cannot open, then you can actually ask your employees to take the holiday. You just need to give them notice.
This is more of an HR issue than a payroll one, but I just thought it was important to make you aware of this. The full detail for what is and isn’t required is at: https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavirus-covid-19
If you are going to put them on holiday you must pay them for that time at their holiday rate of pay. Which means that the business is going to have to pay the 20% difference if you are just paying your employees 80%.
But what you need to do is write a letter to your employees, telling them that you wish them to take their holiday, giving them notice. The required notice period is double the length of the holiday if the employer wishes to require a worker to take holiday on particular days.
Then you just let your payroll team (or TI Accountancy if you are one of our clients) know dates the employee is on holiday rather than just furlough, so that they can process everything correctly.
Most employees will be happy to use their holidays now as the last thing that they want is the business to have no money. I believe it’s all people working together to make the business work and if this small way of them using their holidays whilst they’re on the coronavirus job retention scheme helps, then this will ensure your business comes back strong and staffed!!