How does the Coronavirus Job Retention Scheme affect holiday pay?

Employees can take holiday whilst on furlough and they should be paid as normal. The Working Time Regulations (WTR) obligates employers to pay time taken as annual leave at the normal rate of pay or, where their rate of pay varies, calculated based on the average pay they received in the preceding 12 weeks.

The CJRS guidance confirms you can make a grant for an annual leave furlough day in the same way as any normal working day. This would still be paid at 80 per cent of normal rates (capped at £2,500 per month) as you are in effect ‘topping up’ for those annual leave days by paying the difference between that and their normal pay to your employees

Although furloughed employees are not working, they continue to accrue annual leave, as per the terms of their employment contract.

For help and assistance with furloughing staff please contact us.