Calculating Holiday Pay
The developments in the law relating to the calculation of various types of holiday pay is set out in an ECA guidance note, accessible here.
Holiday Pay and Furlough
The calculation of holiday pay for employees on furlough is an additional factor for some employers.
For employees whose pay is fixed:
When on holiday, their furlough pay should be topped up to 100%. Only the 80% furlough pay will be claimable under the Government’s Coronavirus Job Retention Scheme (CJRS).
For employees whose pay varies from week to week:
In general, their holiday pay will be the average of their pay for the previous 52 weeks. Any week during which pay was reduced due to the employee having been on furlough should be disregarded. In this case, the pay calculation should account for a previous week when the employee received normal pay.
Where the calculation of holiday pay needs to include weeks beyond the usual 52, employers can go back to a total of 104 weeks from the start date of the holiday.
The above guidance for calculating holiday pay is applicable for the 5.6 weeks of statutory holiday or, for holidays under the JIB Agreement, all 32 days of annual leave.
For any additional contractual holidays, the calculation will be based on the stipulation of the contract of employment.
For queries, ECA Members should contact the ECA Employee Relations team on 020 7313 4800.
Last updated 09 March 21