Coronavirus: how has holiday entitlement been affected?

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We are now over a third of the way through 2020, and with at least seven weeks of that spent under lockdown, there is bound to be a lot of annual leave left to be taken in the second half of the year. But what are the employer and employee rights?

In the UK, full-time workers are entitled 5.6 weeks' (28 days) of paid holiday per year. On any given year, 28 days may seem to fly by; however, this year, as we all know by now, this is not your average year.

With lockdown now into its third month, and summer fast approaching, many people will be getting the beach towels out, dusting off the old flip-flops and packing their bags for a couple of idyllic days away.

In reality, this year is likely to see a significant change in the way people take their holiday and may impact our holiday entitlement over the next couple of years too.

How to calculate annual leave

What's your holiday entitlement? How much annual leave can an employee carry over? We've produced short, yet comprehensive answers to the most common questions.

Furloughed workers and holiday entitlement

Employees who have been furloughed under the Coronavirus Job Retention Scheme can request and take their holiday in the usual way, provided they receive the agreement of their employer. However, any holiday that furloughed workers take must be paid in full. Employers can still continue to claim the 80% furlough payment for this day, but must top up the additional 20%.

Coronavirus and carrying over annual leave

One of the outcomes of the coronavirus crisis may be that staff are unable to take all their holiday entitlement during the current calendar year.

To combat this problem, the Government has introduced a temporary new law that will allow employees to carry up to four weeks' paid holiday (in line with the Working Time Directive) into the next two holiday years. The law will apply for any holiday that the employee does not take because of issues related to coronavirus, including:

  • Missing out on holiday due to self-isolation or being too sick to take leave before the end of the year.
  • If an employee continues to work and is unable to take paid holiday.
  • If an employee has been furloughed and has not had the time to take holiday within the allocated time.

This carry forward legislation change does not apply to the full 5.6 weeks’ statutory entitlement, it only applies to the first 4 weeks of statutory entitlement, but employers can choose to allow carry forward of the additional 1.6 weeks if they wish to.

Paying out holiday pay

In the event that an employee leaves their role or is dismissed and has carried over holiday entitlement as a result of coronavirus, then any untaken paid holiday must be added to their final pay.

This, according to HMRC guidance, is the only time that employees should be paid in lieu for unused annual leave.

How to calculate holiday pay

Calculating holiday pay is a problem that companies frequently face. The issue is a complex one, and a surprisingly large number of companies, small, medium and large, remain non-compliant. In this piece, we run through everything you need to know about calculating holiday pay.

Coronavirus and bank holidays

Coronavirus will likely impact UK bank holidays and, as a result, individual employees' holiday entitlement.

During the months where furloughed leave may be taken, there are four bank holidays (Good Friday, Easter Monday, Early May bank holiday and Spring bank holiday).

Employers are entitled to tell employees, regardless of whether they have been furloughed or not, to take paid holiday on a bank holiday. This is the case every year, which is why, typically, bank holidays make up part of the legal 5.6 weeks' paid holiday for full-time employees.

Any employees who have been furloughed, and who are required to take a bank holiday, will be paid 100% for the day in question. Other employers may have decided to ignore the bank holidays and instead re-add them back to the employee's holiday entitlement, allowing them to be taken at a later date.

In the event that bank holidays are unable to be taken because of coronavirus, employees are able to include these days within the four weeks' paid holiday that can be carried over.

How to make the most of UK bank holidays in 2020

Discover PayFit's best tips on how to make the most of UK bank holidays and your holiday entitlement in 2020.

Agreeing on carrying over holiday

If employers do not have an agreement already in place, they can choose whether they will allow additional holiday (holiday above the four weeks' paid holiday) to be carried over. This could include:

  • The outstanding 1.6 weeks' statutory annual leave.
  • Holiday that is above the legal minimum.

Employees who are unsure about their entitlement should check their employment contract and speak to their employers.

Should an agreement be reached, both parties should have access to it in writing.

For employers who remain unsure as to whether they should allow extra holiday to be carried over, it is recommended that they receive legal advice prior to making a decision.

Holiday booked before coronavirus

One of the unfortunate outcomes of coronavirus is likely to be the number of holiday plans affected by lockdown and border closures.

As a result, employees who booked holiday before the outbreak may no longer wish to take that time off. However, an employer can still insist that they do so.

If the employee wants to amend the dates of their holiday, they will need to get their employer's agreement.

Requiring staff to take or cancel holiday

Employers have the right to tell their employees when to take their holiday.

For example, during coronavirus, employers are entitled to shut their premises or place of work for a week and tell all affected employees to take holiday.

However, to do this, the employer must provide staff with a minimum of twice as many days' notice as the amount they require employees to take off. So, if an employer chooses to close for five days, employees would need to receive a minimum of 10 days' notice.

While not recommended, employers do also have the right to cancel pre-booked paid holiday. Should they choose to do this, they must provide the affected employee(s) with the same number of days' notice as the holiday requested.

For example, if an employee was scheduled to be off for 10 days, then the employer must provide 10 days' notice.

Interested in finding out more about how PayFit can help optimise your payroll and HR processes? Then why not book a demo with one of our product specialists today?

PayFit blog author

PayFit blog author


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