Your right to holiday pay whilst furloughed

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The Coronavirus Job Retention Scheme was drawn up by the government as a response to the coronavirus pandemic to protect jobs and prevent mass redundancies.

We are now on version two of the scheme which introduces flexible furlough and sees the government gradually withdrawing their support until the scheme ends on 31st October 2020. We have previously announced that we will be continuing furlough support until the end of October, for those of our employees that are eligible.  As an employer of choice, we are proud to be taking this market leading position.

But what happens with holidays whilst on furlough? Holidays (and holiday pay) are a statutory right under the Working Time Regulations 1998 (“WTR”). The government is also clear in its guidance on furlough that employees will continue to accrue holidays as per their employment contract. Your employment contract must comply with the WTR.

Put simply, if you are furloughed, you are currently accruing holiday entitlement and pay.

This position is no different if you are employed by an umbrella company and you are under their furlough scheme. Compliant umbrella companies employ you under a contract of employment and like any other employee, you are afforded statutory protection.

If you are unsure how many holidays you have accrued whilst on furlough, you should check with your umbrella company. Umbrella companies can’t deny or contract out of your statutory right to holidays and holiday pay.

Holiday pay is a cost to umbrella companies since it is not fully covered by the grant available from the government.  This cost is significant and comes at a challenging time for many businesses and it is therefore perhaps unsurprising that some umbrella companies are looking to manage costs.

Parasol, as market leader, is, and will always, be led by compliance. This offers protection to our employees, our agency partners and our business. We can confirm that we are paying our employees the holiday pay they have accrued whilst furloughed and have calculated this in line with our usual contractual terms of employment. This is the right thing to do, holiday pay is a right of all employees and Parasol employees are no different.

With you all the way

For our employees who are currently on furlough, our employee support team will be in touch with information regarding accrued holiday payment.