How should employers deal with bank holidays that fall within a period of furlough leave?
Where bank holidays are included in an employee's holiday entitlement under their contract, employers should either pay the employee in full for a bank holiday that falls during the period of furlough, or allow them to take a day's annual leave at a later date.
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.