80% furlough actually higher than statutory holiday pay

Ceeem

I am a small employer, all of my staff are currently still furloughed, and I'm a bit unclear as to how to work things out if they were to take some of their holiday entitlement during furlough, as it says the employer has to top up the 80% so they don't lose out but the case for two of them who work irregular hours over the year is a bit more complicated, as the 80% furlough they would receive at the moment is actually higher than whatever holiday pay they're due.

I'm not sure if I've explained it clearly enough but let's say over the past 52 weeks before furlough someone's average hours were 30 per week, but that last August they worked extra and were doing 45 hours a week. Their furlough so far has been worked out as 80% of what they were earning in the same period last year, so at the moment they would be paid for 36 hours a week (80% of 45), whereas if going by holiday pay calculations they would only be paid for 30 hours a week.

Am I able to pay them for 36 hours a week and claim back all of that, as that's what would happen without them taking their holiday entitlement? Or should their holiday pay be 30 hours a week (which kind of goes against the idea of them not missing out)? Would I only be able to claim back 80% of whatever I pay them or the full amount? 

I also have an employee who had only been working for 3 weeks before being furloughed, his contract is for 25 to 30 hours a week, in his first 3 weeks he worked 30 hours each time so his holiday pay would be based on 30 hours a week. But during furlough his pay has actually been 28 hours a week, as going by the HMRC guide it was calculated as 80% of 35 hours a week (it'd been 18 days since his employment had started, which turned out to be 3 full weeks of work as his working days were Thursday/Friday/Saturday/Sunday, but for the purpose of calculating furlough it worked out as 90 hours worked over 18 days, which equates to 35 hours for 7 days). Should I claim for 28 hours a week furlough, and top up 2 hours so he gets 30 hours a week of holiday pay, or something different?

silvercar

Why would anyone on furlough take holiday leave, if it left them with less money than if they stayed on furlough?

Ceeem

silvercar said:

Why would anyone on furlough take holiday leave, if it left them with less money than if they stayed on furlough?

If I'm asking them to? Employers can request for holiday leave to be taken during furlough, so long as they give the proper notice, and top up the pay if applicable. Since holiday pay accrues during furlough, I don't think it's unreasonable for me to ask them to take a proportion of holiday pay that relates to the time whilst they are furloughed, I was thinking 2 weeks is fair since some of them will have been furloughed for 7.5 months before they have to come back to work (and also have some leave that was due in March which they weren't able to take and which has been carried over to be taken at a later date), and I don't think the business can afford to have all 5 members of staff trying to take up to 7 weeks' leave each come November if there's enough work for everyone by then!

Ceeem

And obviously I don't want them to be worse off, which is the reason for my post, I'm just trying to work out what can be done or not.

Jeremy535897

It is a very interesting question. Firstly, in order to claim CJRS, you have to pay at least 80% of reference salary, so for the first category of people, you would pay them at least what you would pay them if they were not on holiday. You have a good argument for not increasing that pay to 100/80 of furlough pay, but I think it is a bit mean to force employees to take holiday and pay them nothing at all on top of furlough. Your other option is to wait for a pay period that does not throw up such an anomaly (ie where average pay exceeds pay in the equivalent calendar period last year).

For the second case, you work out the furlough pay as normal, and then top that up by whatever the holiday pay calculation produces.