COVID-19: Annual leave whilst on furlough

It is coming up to holiday season and naturally, employees will have annual leave booked. So, what is the stance with annual leave if the employee is on furlough? We’ve finally received some clarificaiton from the HMRC. 

As part of the of the guidance released for employees, this now states that it is possible to take annual leave while on furlough. However, you as an employer will need to 'top up' to 100% of the employees normal pay.

In relation to bank holidays, If an employee would usually work a bank holiday then the employer can agree that this is included in the grant payment. However, if the employee would usually take the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu. This will include (10th and the 13th April). 

Employers will have flexibility to restrict when annual leave can be taken, IF there is a business need.

The guidance remains silent on whether an employer can force an employee to take annual leave while on furlough. 

The employees guidance does conclude by saying: "During this unprecedented time, we are keeping the policy on holiday pay during furlough under review."

Its therefore very possible that further changes will be implemented. 

As a reminder, employees which have been put on furlough will continue to accrue their annual leave. Full time employees are entitled to 5.6 weeks of statutory paid annual leave each year.


Authors: Roxanne Bradley

Published: 20 Apr 2020


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