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May Bank Holidays and Furloughed Workers

Posted on 29th April 2020 - News

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The early May Bank Holiday, instead of being on Monday 4th May, will be on Friday 8th May to coincide with Victory in Europe Day, or VE Day, which marks the 75th anniversary of the formal end of World War II.

If an employee is on holiday or has a scheduled Bank Holiday while on furlough, they are entitled to still receive this holiday. Employers must ensure that any employee on holiday or a Bank Holiday is paid their full salary for that period of holiday.

Therefore, employers must schedule to pay employees’ full wages on the following dates although this does not impact their furlough status:

  • 8th May 2020
  • 25th May 2020

When looking to make payroll payments for Bank Holidays for those staff furloughed, the following approach should be taken:

  • 80% up to a maximum of £2,500 of the employees pay to be paid through the Coronavirus Job Retention Scheme along with NIC and Pension payments
  • 20% or the balancing figure, if normal pay is over £2,500, of the employees pay is to be paid by the employer along with NIC and Pension payments

Where a furloughed employee is not entitled to bank holidays off under their contract, a bank holiday will have no effect on their pay during the furlough, or on their annual leave entitlement.

Previous versions of guidance published by HM Revenue and Customs (HMRC) on the Coronavirus Job Retention Scheme did not mention how employers should deal with annual leave for furloughed employees. This is now addressed in HMRC guidance on calculating wage costs for claims under the scheme, which was published on 17 April 2020 and updated on 27 April 2020.  

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