We have received the following information from our HR support regarding paying staff while on furlough.
HMRC confirmed late on Friday (as usual!) that it is possible for employees to take annual leave whilst on furlough.
Updated only within the “Employee’s Guidance” it now states that it is possible to take annual leave while on furlough, with the employer having to ‘top up’ to 100% of normal pay for the holiday period.
This carries a health warning though, as worryingly the Guidance concludes this section by saying: “During this unprecedented time, we are keeping the policy on holiday pay during furlough under review.”
They haven’t updated the employers guide so far!
Acas has also changed its website information, from initially advising no holiday during furlough to now confirming the same as HMRC.
With payroll looming for many, you may want to consider “topping up” for the two recent April Bank Holiday Days (Easter Friday and Monday) rather than have them carry over.
I would suggest you separate out (if your software is able) and clearly show (or ask your payroll provider to show) the different pay-lines on the wage slip, for example:
- Attended Hours or Salary
- Furlough Payment
- Holiday Pay (not during furlough)
- Holiday Pay Top Up (Whilst on Furlough)
You should also be aware that recent legislation will be introduced in relation to a holiday, namely:
On 27 March 2020, the government also announced that new legislation (The Working Time (Coronavirus) (Amendment) Regulations 2020) would be coming into force which will amend the Working Time Regulations 1998 to include the provision that: where it is not reasonably practicable for a worker to take some, or all, of the holiday to which they are entitled due to the coronavirus, they have a right to carry up to four weeks into the next two leave years. This will not apply to the additional 1.6 weeks (this can be carried forward currently by one year by individual agreement between an employer and staff)
Please be aware you are required to give employees three weeks notice if you intend to ask them to use the holiday period.