Does The Furlough Scheme Cover Holiday Pay, Furlough Leave And The Job Retention Scheme For Coronavirus Landau Law
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Employers can continue to claim through the job retention scheme for furloughed workers even when they are taking holiday.
Self employed profit and loss statement for small business. When an employee becomes sick while on furlough employers can choose to either keep the employee on furlough continue to pay 80 wages and claim for it via the scheme or put the employee on sickness absence and pay sick pay as appropriate. You can agree with your employer to vary holiday pay entitlement as part of the furlough agreement however almost all workers are entitled to 56 weeks of statutory paid annual leave each. In view of the two extensions to the furlough scheme the issue of what happens to holidays is important.
However as taking holiday does not break the furlough period the employer can continue to claim the 80 grant from the government to cover most of the cost of holiday pay. It is therefore important to distinguish between periods of leave taken up to 5 april 2020 and subsequently. Employers must pay er nic and pension contributions as well as topping up the employees wages so that they reach 80 for the time that theyre furloughed.
The government has extended the furlough job retention scheme until october 2020 although specific details of the scheme from august are yet to be clarified. In this case employers can still use the furlough scheme to cover 80 percent or 2500 gross if lower of holiday pay but should then be topping up workers holiday pay to 100 percent. So if an employee were to go back to work for two days a week for example their employer would pay them for the hours theyve worked and the furlough scheme would continue to pay them for the remaining three days a week when theyre on furlough.
However as taking holiday does not break the furlough period your employer can continue to claim the 80 per cent grant from the government to cover most of the cost of holiday pay. Any holiday entitlement that is taken for bank holidays or any other days must be paid based on the holiday pay regulations which changed on 6 april 2020 si 20181378. The employer is required to top up the employees gross pay when holiday is taken if the employee is entitled to higher holiday pay than their furlough pay.
In october the final month of the scheme the government will pay 60 with a cap up to 1875 for the hours the employee is on furlough. Carrying annual leave.
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