Please note that coronavirus guidance is a rapidly evolving area and this blog is correct as at 1 April 2020. Any later updates from the government or clarifications of laws or the HMRC scheme may change the advice provided in this blog. For all the latest government guidance for businesses, employers should check the .GOV website.
Carrying Over Annual Leave
Last week the government relaxed regulations to allow employees to carry over annual leave into the next two leave years. This is where it has not been reasonably practical for the employee to take or use their annual leave due to the coronavirus epidemic.
The government has implemented this to ensure that people won’t lose their annual leave entitlements given the current epidemic, particularly where staff have been working in the national effort against COVID-19.
This also gives businesses more flexibility to manage their staffs’ annual leave which will be a welcome development for many employers. A number of key questions we have been receiving from clients is how to manage staffs’ holiday entitlement; from managing the back log of annual leave for the rest of the year post return to normality, through to what to do with employees cancelling their annual leave bookings as they can no longer travel abroad.
The regulations amendment allows up to four weeks of unused leave to be carried into the next two leave years. The rules will apply to all types of workers including agency, irregular hours and zero hours staff.
Annual Leave and Furloughing at the Same Time
The government has not yet confirmed how annual leave interacts with being furloughed. Acas has assumed that an employee cannot be on both furlough and annual leave at the same time. However other legal experts have debated that this is not the case as current guidance for employers doesn’t confirm this. Therefore, there is currently nothing to stop employees being on both annual leave and furlough at the same time.
If employees want to or are asked to use annual leave whilst on furlough, this will need to be paid at 100% of their usual earnings. The employer can then claim back the 80% through the HMRC scheme. Employers should note that employees are entitled to normal renumeration for first four weeks of their annual leave including regular payments of bonus, commission and overtime etc.
Readers should note that this is subject to further clarification from HMRC.
Insisting Staff Use Annual Leave
Employers can encourage the use of annual leave for staff who are still working or working remotely. They can ask staff to use their annual leave on set dates, as long as they give twice the amount of notice of the length of the holiday, e.g. if you want staff to take a week’s holiday then you would need to give at least two weeks’ notice.
Sick Leave and Furloughing
If an employee is on sick leave or self-isolating they are eligible for Statutory Sick Pay (SSP). Employees cannot be furloughed whilst being off sick but they can be furloughed after this. Therefore, an employee cannot be on sick leave and furloughed at the same time.
Maternity Leave and Furloughing
If an employee is eligible for statutory maternity pay (SMP) or maternity allowance then the usual rules will apply and they can claim up to 39 weeks’ SMP or maternity allowance. However, if your business offers enhanced contractual maternity pay, then this is included in wage costs that you can claim through the HMRC scheme. You can be on maternity leave and furlough at least for the purpose of the amount of money that’s over the basic SMP rate.