I run the client's payroll which includes part time and zero hours staff. Employees accrue holiday pay at 12.07% and they may take it at a time to suit them.
When calculating these employees average wages for furlough purposes I have included all holiday pay, both taken and accrued, in their total wages since holiday pay is a statutory part of the employees remuneration.
I use 80% of this value as their furlough payment, and since this is based on their wages including holiday pay, I have said that the employees will not accrue holiday pay over and above the furlough payment.
Has anyone seen any official rules on this? Does this seem a reasonable approach? Has anyone taken a different approach?
Replies (5)
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They can take their holidays later so I suspect your view is an optimistic one.
Furlough is not holiday, as the peelers are fond of saying to folk in parks.
The guidance simply states 80% of average earnings, no reference to accrued anything. Indeed, on the subject of holiday, heres what ACAS says:
"The government has introduced a temporary new law allowing employees and workers to carry over up to 4 weeks’ paid holiday over a 2-year period. This law applies for any holiday the employee does not take because of coronavirus, for example if:
they’re self-isolating or too sick to take holiday before the end of their leave year
they’ve been temporarily sent home as there’s no work (‘laid off’ or ‘put on furlough’)
they’ve had to continue working and could not take paid holiday."
But that's in reference to taking holiday not paying it. If someone is paid a rate which includes holiday pay then the above doesn't come in to it. And that IS their pay.
If You're including accured holiday pay in the furlough calculations but you don't actually include them in normal pay then no I don't think that's correct.
If someone was paid x per month which included holiday pay and they were able to take holiday whenever then yes I'd include it. But I would not include future holiday pay entitlement.