Furloughing over bank holidays

Updated: Jan 20

Bank holidays present an additional complication to paying staff who are on furlough. Employers should bear these in mind when doing their financial planning.

Most of the UK has eight permanent bank holidays per year. New Year's Day, Good Friday, Easter Monday, May Day (75th Anniversary of VE Day in 2020), Spring Bank Holiday, Late Summer, Christmas Day and Boxing Day.

Bank holidays and annual leave

How much do you know about employment requirements surrounding bank holidays? Here are three things all employers should know:

1. There is no statutory right for employees to take bank holidays off work. Any right to time off depends on the terms of the employee’s contract of employment.

2. When an employee works on a bank holiday, there is no statutory right to extra pay. Any right to extra pay depends on the terms of the employee’s contract of employment.

3. If you have employees currently on furlough, you need to be mindful of bank holidays. If it states in their contract that holiday entitlement includes bank holidays, you have two choices:

- Pay the employee in full (not the reduced furlough rate) for the bank holiday that falls during furlough

- Substitute it with a day’s annual leave which can be taken at a later date. The employee must be formally notified of this if this is the case.

If the furloughed employee is not entitled to bank holidays off in their employment contract, a bank holiday will have no effect on their pay during furlough.

Your accountant will not be able to advise you on the HR implications of this. They will, however, need to know which of the above two choices you have selected. This is so that they can run your monthly payroll. If you have any questions about this, or are uncertain of your payroll needs, please get in touch.