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NMW and holiday pay during furlough

Does holiday pay need to meet NMW?

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Employees have taken a 10% pay cut, including those on furlough. For some, this takes then below NMW, however as they've been fully furloughed this hasn't really been an issue.

However, they're now being asked to use up holiday entitlement. I understand that holiday pay as such does not need to meet NMW, but has to be calculated in line with the Working Time Regs, which would ordinarily mean that holiday pay is above NMW by default.

In these circumstances though, they are accruing holidays on furloughed hours on which NMW does not apply. So does this mean that paying them holiday pay at their 10% reduced rates - which are sometimes below NMW - is acceptable?

Doesn't seem right. My head hurts!

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By tom123
25th Sep 2020 14:18

Well, I am topping up holiday pay to the usual daily rate - given that we are instructing people to burn through their holidays that seems the least we can do.

(NMW doesn't apply to us generally).

For normal furlough we have not topped up.

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By michaelbeaver
25th Sep 2020 14:56

My understanding is that holiday pay is part of their contractual pay so it should be paid at their full daily rate.

Whilst not part of furlough, taking holiday whilst on furlough doesn't breach it, so it's allowable.

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Replying to michaelbeaver:
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By tom123
25th Sep 2020 15:24

Whilst not part of furlough, taking holiday whilst on furlough doesn't breach it, so it's allowable.

- that bit scares me Michael, are you saying you wouldn't be claiming furlough for the 80% portion of the holiday time?

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Replying to tom123:
By michaelbeaver
25th Sep 2020 16:27

No it means that you can still claim furlough at 80% (or 70 or 60) for those holiday days, but we've been topping up the additional 20% (or 30 or 40) for those holiday days, so that the employee gets paid their contractual rate for just those days.

Does that make sense? I don't know. It's Friday, and it's already beer o'clock and I'm still at my desk.

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Replying to michaelbeaver:
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By tom123
26th Sep 2020 09:43

Great, thanks.
I have had a 'mare of a payroll month this time - and was doubting myself after I had sent the BACS file...

I hope to god our company doesn't make use of the new 'scheme'.

(I don't think we are planning too)

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By C Graham
29th Sep 2020 11:34

holidays paid at normal contractual salary - must be topped up if employees take days during furlough inc bank holidays if included in stat minimum 28 days.

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