Coronavirus Job Retention Scheme: your holiday and sick pay questions

Please note: the information on this page is correct as of the 26th March 2020. We are continuing to monitor the advice given by the Government and will update this page as and when necessary.

With the announcement of Chancellor Rishi Sunak’s Coronavirus Job Retention Scheme, employers were reassured that the government will pay up to 80% of wage costs for those employees who would otherwise be made redundant.

We’re currently waiting on the exact details of how the scheme will work and the guidance they have published so far is very much top line.

Understandably, business owners and employers have many questions over the finer details of how the scheme will apply to them. While we don’t have all the answers at the moment, we’ve collected the most frequently asked questions we’ve had about sick pay and holidays over the last few days, and paired them with our current guidance.

I have an employee on long term sick leave – should they be furloughed?

We do not know as the scheme rules have not been published but we would assume not given that the individual is not available for work.

I have an employee on long term sick leave who has asked to be furloughed. Should I agree?

We do not know how the scheme will define a furloughed worker, but the employer will want to be wary about agreeing to treat people as furloughed workers, paying furlough pay and then finding they fall outside the scheme and this money can’t be reclaimed.

If the employee is still unfit for work, then the answer above applies and it is likely that they would fall outside the scheme as they are not fit for work and their absence is not COVID-19 related.

The position is different if the employee is now saying they are fit to return. At the very least the employer should ask the employee to provide evidence that they are fit to return to work. It should be explained to the employee that this is necessary to satisfy the anticipated requirements of the scheme. If on the face of the medical evidence, the employee is fit to return, but no work is available, then we would expect the employer to be able to designate them as a furloughed worker. However, until the scheme details are released, we can’t say this for certain.

What happens to a period of pre-booked holiday which falls within a period of furlough?

When it comes to holidays, we are still completely in the dark as to how normal holiday rules will operate within a furlough period. On the one hand, it seems that furlough is more akin to lay off and it is acceptable that holidays are taken and paid for during a lay-off period, rather than maternity leave which is period of leave which can’t be interrupted (apart from Keep In Touch days). However, much will depend on whether HMRC’s system can identify any periods of holiday and discount them from the claim for reimbursement as otherwise, the government would be subsidising the employer’s obligation to pay holiday pay.

Can an employee request a holiday during a period of furlough and what should be paid during the holiday period?

If the employee is on holiday, then they should be paid full holiday pay. However, we do not know for sure whether holidays are allowed to be taken during a period of furlough. I think our best advice would be not to agree to any new requests for a holiday until this point is clarified when the scheme rules are published.

Can I top up my employees pay to 100% and then deduct a day of holiday each week?

This will almost certainly not be acceptable as the government are only paying 80% but under this system, you would be claiming in essence 100% for the available days.

Helping you protect your business in uncertain times

Our HR and Employment Law experts are following the latest government updates to find out as much information about the Coronavirus Retention Scheme as possible, and help you understand the help available to you to keep your business up and running.

Keep an eye on our latest articlesfree guides and social media for more advice and guidance. And if you’re already a Citation client, you can call our advice line on 0345 844 4848.

If you’re not a Citation client yet and you want the support of our team of HR and Employment Law experts, give our team a call on 0345 844 1111 to talk through your business needs. Or, just fill out your details in the form opposite and we’ll be in touch as soon as possible.

COVID-19: a guide to the Coronavirus Job Retention Scheme and furloughed workers

A summary of the government's Coronavirus Job Retention Scheme and how to designate furloughed workers in your business

Download the guide

COVID-19: financial support for small and medium-sized businesses

A summary of the financial support available from the government to small and medium-sized business.

Download the guide

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