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Covid-19: Holiday pay and entitlement – what you should know.

The Government has recently published further guidance on holiday entitlement and holiday pay during the Covid-19 pandemic.

Please click here for full details of the guidance.

The key points include:

Holiday Entitlement

In terms of holiday entitlement, the guidance states that furloughed workers should continue to accrue entitlement to annual leave under the Working Time Regulations 1998 and that furloughed workers can take holiday without bringing the period of furlough to an end.

Requiring workers to take holiday during furlough leave

Employers can require workers to take annual leave while they are furloughed.  This is subject to the usual statutory notice periods which is double the length of the holiday they are asking the employee to take eg. For a 5 day holiday, the employer must give at least 10 days notice. The guidance advises businesses to “engage with their workforce and explain reasons for wanting them to take leave before requiring them to do so.”

The guidance goes on to say that employers should consider whether the aim of annual leave (rest and relaxation) is met if someone takes annual leave during furlough:

“If an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday”.  

The recent partial lifting of the lockdown may well make the employers request more reasonable.

Carrying forward annual leave

The guidance states that furloughed workers are unlikely to need to carry holiday forward as they will be able to take it during the furlough period. 

New emergency legislation has been passed by the government allowing workers to carry forward up to the 20 day holiday element for two years if any were unable to take this due to the coronavirus crisis. This legislation is designed to help those such as key workers who have been unable to take their leave due to working on the front line.  The guidance provides factors that employers should take into account as to whether it was reasonably practicable for a worker to take leave.  This update provides employers with greater flexibility and allows them to ensure furloughed workers do not return to work with excessive amounts of annual leave.

Holiday Pay

The guidance confirms that holiday pay during furlough must be ‘normal remuneration’. If this is higher than the furlough rate of pay, the employer will have to make up the difference (although they are still able to claim up to 80% (or £2,500 per month) under the Coronavirus Job Retention Scheme.

If employers cannot afford to make up the difference between holiday pay and furloughed pay, this will likely prevent the worker from taking leave and it is therefore likely that a worker would be able to carry forward the annual leave under the Regulations. The guidance also mentions workers and employers agreeing whether or not holiday may be taken on a bank holiday during furlough.

This updated guidance clarifies some questions surrounding holiday entitlement and pay during furlough but it is only guidance, it is not legally binding.  The Employment Tribunals may well take the guidance into account when deciding holiday pay disputes but we would advise specialist legal advice is sought.

If you have any queries about your holiday entitlement and rights during the coronavirus pandemic, contact our specialist employment solicitor,  Lisa Aitken for a free initial consultation on 07960 469988   or email:

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