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The importance of remembering holiday allowance

The importance of remembering holiday allowance

After the announcement on Friday (29th May) about improved flexibility to bring furloughed employees back part time in July, and a new taper requiring employers to contribute modestly to furloughed salaries from August; David Hodgson, Treasurer of North Tyneside Business Forum spoke to us about some important information on holiday entitlement during furlough.

“If an employee has been placed on Furlough, then any holiday days get deferred and are rolled forward to taken and paid at full 100% rate at a later date. This equally applies to any bank holiday days as they are part of the legal minimum of 5.6 weeks paid holiday per annum entitlement.

The entitlement to defer the bank holidays also comes under the new temporary law allowing employees to carry over up to 4 weeks paid holiday into their next 2 holiday leave years.

If an employee leaves their job or is dismissed and has carried over paid holiday entitlement, this must be added to their final pay (“paid in lieu of notice”)

The only variance that would affect bank holidays is where the employment contract states that staff must take bank holidays as paid leave, then the bank holidays, (unless there has been an agreement to the contrary), will have to be paid during the furlough period but these days will need to be paid at full 100% rate of pay.

A further issue to remember for employees who have been furloughed from March and were  paid a minimum pay rates is that the employees will need to be paid at new higher rates of pay for the recent bank holidays as the minimum rate of pay was increased on 1st April 2020, (whereas the furlough rate of pay will be determined by their previous lower rate of minimum wage).”

Best wishes and stay safe and alert.


Read, Milburn & Co

Chartered Accountants

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