UPDATED: Managing Holiday Leave during COVID-19Natalie Lewis
Managing holiday leave during COVID-19 is going to be tricky here is my guide to navigating through the situation. You should talk to your staff and explain to them the situation around taking holiday leave this year and how their support would be appreciated.
What is normal holiday leave entitlement?
Statutory Annual Leave is 28 days (5.6 weeks) in the UK. Some employers choose to provide more. In most situations, employees and workers should use their statutory paid holiday in that current leave year.
This is important because taking holiday helps people to get enough rest and keep healthy (physically and mentally).
Why does holiday leave need to be managed differently during COVID-19?
During the coronavirus outbreak, it may not be possible for staff to take all their holiday entitlement. They may be getting to the end of their leave year with holiday still left to take. For example, this could be because:
- they’re self-isolating or are too sick to take holiday before the end of their leave year
- they’ve been temporarily sent home as there’s no work (‘laid off’ or ‘put on furlough’)
- they’ve had to continue working and could not take paid holiday
What are the new rules around holiday leave during COVID-19?
The government has introduced a temporary new law to deal with coronavirus disruption. They are allowing employees and workers to carry-over up to 4 weeks’ paid holiday over a 2-year period if they cannot take holiday due to coronavirus.
Further guidance was released on 13th May 2020 giving clarification to the confusion around taking annual leave and furloughed employees. See below!
Is holiday leave accrued whilst on furlough?
Yes, whilst a worker or employee is still on a company’s payroll, they accrue holiday leave. If you have laid-off or put your staff on furlough, they will continue to accrue annual leave.
How could this impact a business you might ask? Assuming that staff usually take holiday leave regularly throughout the year, when things finally get back to normal, they may well have more leave left to use up in the last quarter of the year which will leave companies with a problem.
Can we force employees to take holiday leave?
Employers have the right to tell employees and workers when to take holiday if they need to.
If you decide to do this, you must give your staff notice of at least twice as many days as the amount of days you need people to take. For example, if you want to staff to take 5 days holiday, you should give them at least 10 days notice.
Where an employee has previously booked holidays and they no longer want to take that time off you may still tell them to take that time off.
How can we manage holiday leave effectively during COVID-19?
Given that staff will be paid their normal level of pay when they take annual leave, it is my opinion that staff may want to use some of their annual leave in the next few weeks and months, especially where they have been put on furlough leave.
On the 13th May 2020, the government released guidance on how employers can manage holidays during this pandemic and most specifically for furloughed staff. This advice has opened up the ability for staff to take holidays whilst they are on furlough. Previously HMRC and ACAS told us that we couldn’t allow staff to take holiday whilst they were furloughed.
Many of my clients are asking their employees to take some annual leave now, ensuring that they have enough leave leftover for the last quarter of the month (to take some time off including time around Christmas) but not so much that it causes disruption to business when they want the team to hit the ground running once this crisis is over.
With the ability to allow staff to carry over up to 4 weeks of annual leave into the next two years, it is up to you whether you feel that this would suit your business better. My concern is that working from home can be quite stressful for those who are not used to it and with kids, dogs and partners all creating additional demands and frustrations, people may still want to take annual leave in the next few months so this should be encouraged.
However, those employees and workers on furlough may not want to take annual leave as they are not able to go away and are already not working. It could also be argued that ‘shielded’ individuals couldn’t take advantage of any annual leave as they are not reasonably or effectively able to take it for ‘rest’ and ‘relaxation’ which is what holidays are there for. If you find yourself with employees in that situation, please call me for advice before forcing them to take annual leave.
Do we pay full holiday pay to furloughed employees?
Yes! You should pay your staff based on their usual earnings and not based on what they are receiving through furlough. The underlying principle is that a worker should not be financially worse off through taking holiday. You can use the grant to pay 80% of their holiday pay but you will need to top up the rest so that they receive 100%.
If you have an urgent need to furlough employees or make redundancies, get in touch with me here.