Q: What happens with holidays and holiday pay?
A: Employees continue to accrue holiday while on furlough.
Employers can continue to require employees to take holidays and cancel holidays, subject to the required notice being given by the employer:
- When cancelling planned annual leave, employers must give employees the same number of days’ notice as the number of booked days of annual leave
- When requiring staff to take mandatory holiday, employers must give employees twice as much notice as the number of days they will be asking staff to take off
You should check your employment contracts in relation to the upcoming bank holidays at Christmas. If an employee usually works bank holidays and is furloughed, they just continue on furlough. If an employee is usually on leave for bank holidays, you would need to top up their furlough pay to full holiday pay or give them a day off in lieu.
Q: What about holidays for employees on flexi-furlough? One of my employees is contracted to work full time and under the flexi-furlough scheme we have agreed they will work on Mondays and Tuesdays and are furloughed for the rest of the working week. They have now requested to take 1 week as annual leave, what do we do?
A: The current GOV.UK guidance confirms that when an employee is flexi-furloughed, and they take holiday these hours can be claimed as furloughed hours. This means, at the moment, that an employer can claim under the furlough scheme for the employee’s whole week on holiday in this scenario. As this is annual leave, you would still need to top up their furlough pay to full holiday pay.
However, this does not mirror the rest of the GOV.UK guidance which says employees should not be placed on furlough simply because they are on holiday. We recommend employers act with caution and do not deliberately furlough employees to claim towards holiday pay. Employers should take specific legal advice as each situation will vary and it may be that HMRC argue that applying the furlough scheme in this scenario is not within the ‘spirit’ of the scheme.
Q: I usually close my business for two weeks over a quiet period at Christmas. This year, can I furlough my employees for this period?
A: The guidance does specify that businesses should not place employees on furlough just because they are on holiday. This means employees should not be placed on furlough if you usually close at Christmas and this could be considered abuse of the scheme. See the next question too!
Q: How is the government intending to deal with furlough fraud?
A: One of the big changes with the new scheme is that HMRC will start publishing information about employers who are claiming furlough. This is a complete change from the first part of the scheme as HMRC previously confirmed it was prohibited from naming the companies that used the scheme.
From the start of December, this information will have to be published. The GOV.uk website will detail the Company name (and number) as well as details of the amount claimed or ‘an amount that gives a reasonable indication of the claim, rather than an exact amount’. This information will remain available online for up to a year.
Q: When do I need to make a claim?
A: This is another key point for employers to be aware of. The Government has confirmed this scheme will be in place until 31 March 2021 but there are specific deadlines for making a claim. For claims up to and including 31 October 2020, you must submit the claim by 30 November 2020.
Claims relating to November 2020 must be made by 14 December 2020, December claims must be submitted by 14 January 2021 and January claims by 15 February 2021. You should diarise these timeframes and ensure you are planning ahead.
Q: What about the Job Retention Bonus? Will I still get that in January 2020?
A: No, due to the extension of the Job Retention Scheme (‘furlough’) the Job Retention Bonus has been removed and employers will no longer be eligible to claim this money.
The existing guidance confirms that a retention incentive will be used at an appropriate time but it remains to be seen if the same proposal will be reintroduced or if a similar scheme will be considered.